Carbon Retirement

[Tristan_Parker]

Carbon Retirement was set up in 2008 to provide an effective and ethical method of carbon offsetting.

On behalf of organisations and individuals that want to offset their unavoidable emissions, Carbon Retirement buys industrial ‘pollution permits’, and permanently removes them from the EU’s Emissions Trading Scheme. There are a fixed number of annual permits available through the scheme, and reducing the number of these permits in circulation means that industries are therefore forced to invest in reducing emissions, as their means to create these emissions – through purchase of these permits – is gradually limited.

Carbon Retirement Director Jane Burston believes that offsetting in this way tackles the problem at its root: “By voluntarily ‘retiring’ permits, our customers are promoting long-term behavioural change where the real issue is – in the developed world. Offsetting in this way reduces our dependence on fossil fuels and moves us more swiftly to a low carbon economy.”

The Carbon Retirement website shows the daily price of these permits, also known as EU Allowances or EUAs, which are the European Union’s way of enforcing a cap on carbon emissions in the Emissions Trading Scheme. One EUA represents the ‘right’ to emit one tonne of carbon dioxide. Clients then choose how many tonnes/EUAs they want to ‘retire’ out of circulation, which can be done by choosing an amount manually or by using an offsetting calculator, which calculates the relevant number of tonnes to retire in relation to, for example, a flight or car journey. For larger purchases, or if a client does not know how much they need to offset, Carbon Retirement also provides a carbon footprinting service.

The company funds its activities by charging an admin fee on the market price of a tonne of carbon dioxide (a clear breakdown of all costs involved in the purchasing process is available on the website), and also earns income through advisory work, helping clients to measure and reduce their carbon footprints. Clients come from a range of sectors, but primarily advertising and media, professional services, environmental businesses and not-for-profit organisations.

The EU Emissions Trading Scheme, in which EUAs are used as rights to emit, helps to cap carbon emissions from European industry. The scheme covers over 40% of Europe’s greenhouse gas emissions and in its current phase it distributes around two billion permits annually to industrial companies through a combination of ‘grandfathering’ (handing the permits out for free based on past emissions) and auctioning. This represents a 7% reduction on 2005 emissions across the participating industries.

The companies in the scheme determine whether to reduce their emissions to meet the cap or buy permits from other companies that may have cheaper emissions reduction projects available, hence the trading element of the scheme.

Though still a popular method for some organisations and individuals to reduce environmental impact, carbon offsetting has in recent years received criticism, amidst claims that it sidesteps the underlying issue of reducing carbon emissions directly, as it effectively ‘legitimises’ pollution. Carbon Retirement’s method aims to bypass this problem by focusing its offsetting on ‘retiring’ carbon emissions that would otherwise be used. They also work only with clients who are committed to reducing their carbon footprint and support companies undertaking this process through tailored carbon management strategies and employee engagement programmes.

The company’s founders claim that they have arrived at the most effective method of offsetting through their approach, which is recommended by the UK Government’s Quality Assurance Scheme for Carbon Offsetting, receiving the scheme’s Quality Mark.

“Over the coming years, retirement of permits from established cap-and-trade schemes could become the dominant form of voluntary offsetting”, says Jane Burston. The market is certainly moving towards more robust project types and the overwhelming majority of offsets purchased are third party-verified. This, claims Burston, demonstrates an increasing desire for certainty in the emissions reduction process, and is likely to push more companies to offset via retirement of cap-and-trade permits in the future.

As well as being the driving force behind what could be a significant shift in market activity, the founders of Carbon Retirement want their business to act as a catalyst for driving better practice through the carbon offsetting market. “We want to improve the transparency, effectiveness and responsibility of the whole industry”, says Burston.