Why "going carbon neutral" is still a hoax 🛢

Lately, I've seen a lot of companies claiming that they are going to reduce their carbon footprint to net zero. Companies like Amazon, Apple, Unilever, and even Volkswagen and Shell.

But what does net zero carbon footprint even mean? And does it really help with global warming?

To answer these questions, we need to have a look at two concepts. Carbon credit and carbon offsets.

1. What is carbon credit?

Governments around the world are introducing a cap on how much CO2 can be emitted by certain industries. To define how much emission each company can emit, a government distributes or sells carbon credits to companies in a given industry. So, a carbon credit is essentially the right to emit carbon in the atmosphere.

But companies can also trade their credits. Those that emit less can sell it to larger polluters. This is called a cap and trade system. For example, Tesla is selling their carbon credits to other car manufacturers. As a result, a company can pollute more than the initial credit they have been allocated and still reach their goal.

The idea is that countries gradually reduce the total industry cap and hence reduce pollution. As the carbon credit market is following the rules of supply and demand, it will get more expensive to pollute. This gives companies time and incentive to transition to more environmentally friendly technology.

2. What is carbon offset?

A carbon offset is an investment in a project that either takes CO2 out of the air, like planting trees, or that prevents CO2 from being emitted in the first place, like building a wind park that replaces a coal power plant. Every carbon offset project is linked to a specific quantity of greenhouse gas emissions saved. So, when a company invests in such a project, they can count the offset against their CO2 emissions. 

For example, if a company contributes to 10 metric tons of CO2 emissions per year, it can offset it by investing in carbon offset projects that prevent or take 10 metric tons of CO2 out of the air.

This way, companies can become "carbon neutral" or "net zero". And there are various reasons why companies do that. For example, pressure from customers, good press, employee retention, and attraction, etc. The reasons don't even matter as long as progress is made, right? 

3. So, are carbon credits and offset working?

Unfortunately, not at the moment. The fines for exceeding carbon caps are ineffectively low so in most industries companies still make more money by polluting. And business is an incentive game. If companies can make more money by polluting, industries will gravitate there. Even if there is just one company willing to pollute more for the sake of profit, others are forced to follow to be competitive.

Unfortunately, things are not brighter on the carbon offset side. Most of the offset projects don’t deliver the reductions that they promise. So, companies' claims to have net zero carbon footprint are in most cases simply false.  

But the future is not just bleak. There are carbon offset projects that do deliver on their promises. And legislations usually need a few tweaks before they start working as intended.

4. How is this relevant for designers? 

• As manufacturing is responsible for a fifth of global carbon emissions, product design plays a key role. When designing new products (and services) try to understand their carbon footprint. Here's a great article describing a carbon footprint calculation for six common products.

• If you are working for a company or a client that is in an industry with a cap and trade system, make sure you understand the current and upcoming legislation. Which way are governments pushing companies? You can use this knowledge when making a case for your design proposal ("If we move to this solution, we can save $X").

• If your company is proactively trying to offset its carbon emission, try to steer investments into the most effective projects.