Carbon Offsets, Once Hyped, Lose Allure in Travel Sector

When airlines and tour operators first launched carbon offset programs in the mid-2000s, customers seemed eager to join.

Buying a carbon credit meant investing in a project that would reduce greenhouse gas emissions elsewhere — essentially offsetting the emissions created by traveling.

But the hype surrounding these programs hasn’t panned out. Today, consumers only offset about 2 percent of international flights, a figure that’s likely to remain flat in the future, according to industry experts. Less than 1 percent of travelers choose tour packages that have offsetting options.

“In tourism, people started to talk a lot about the issue, but it’s since faded away. Right now, nobody is talking about carbon offsets in the industry,” said Dietrich Brockhagen, executive director of Atmosfair, a German climate organization that offers credits and develops related projects, including a biomass plant in India and a wind farm in Nicaragua.

Travel’s Toll

Offset programs initially cropped up after the 1997 Kyoto Protocol, the treaty under which the European Union and other industrialized countries — not including the United States — agreed to slash emissions. Then, a decade later, the U.N.’s Intergovernmental Panel on Climate Change said it found “unequivocal” evidence of global warming and that human activities were very likely to be the cause. Conversations about the climate captivated governments and citizens worldwide.

Consumer interest in carbon offsets swelled. For tourists and business travelers concerned about their carbon footprint, buying credits was more realistic than staying at home to avoid airplane emissions, and it seemed better than doing nothing at all.

The tourism sector accounts for about 5 percent of overall greenhouse gas emissions. Of that slice, about 40 percent come from aviation, according to the United Nations Environment Program. In the next two decades, tourism-related emissions alone could double without a dramatic change in policy or technology.

The buzz for offsetting eventually died down as international climate negotiations sputtered and the global financial crisis rippled throughout the world’s economies. Suddenly carbon credits seemed like a frivolous and burdensome extra. People began thinking, “‘There’s no hope that we’ll come up with a decent approach to tackling climate change, so why should I put additional resources into this anyway?'” said Stefan Gössling, a research coordinator at the Western Norway Research Institute’s sustainable tourism center.

He said the travelers who are still buying credits “are really the hardcore environmentalists, the people who are really concerned about climate change and prepared to pay for that.”

Business Today

Even so, the broader market for carbon credits is holding steady, and not all travel companies have abandoned the space.

Companies, governments and organizations across all industries voluntarily bought credits worth 101 million metric tons of carbon emissions in 2012, up 4 percent from the previous year, Ecosystem Marketplace reported.

More than 30 airlines offer customers the option to buy offsets, according to the International Air Transport Association, a trade group for about 240 airlines. In January, Hilton Worldwide expanded its own offset program to include 17 hotels in Southeast Asia. Under the initiative, Hilton buys carbon credits to cover the emissions generated by meetings and events held at the properties.

Brockhagen said that 10-year-old Atmosfair still drives some business from offsetting. Volkswagen and other large companies, which face pressure from environmental groups to reduce emissions, purchase credits to offset their employees’ business travel.

Small, niche tour operators that typically serve a wealthier clientele are also buying credits, the cost of which is included in the tour package. For the most part, however, Atmosfair’s revenues mainly come from the travel-related consulting services it provides to big corporations filing annual sustainability reports.

But carbon offset programs still face broader challenges beyond limited consumer interest.

Critics argue that there’s little proof that the programs actually cancel out the emissions created by flying, driving or using coal-fired electricity. And offsetting takes pressure off of airlines and other companies to invest in energy efficiency or lower-carbon energy sources. In the worst cases, some carbon credits have been sold multiple times, and the green projects they fund fail after a few years.

Calculating the value of credits is also tricky. Most airline credits account for just one-third of a flight’s actual climate impact, since they only factor in carbon emissions and not other pollutants and particulates, according to Brockhagen.

The Atmosfair director said that even done properly, carbon offsets should only be seen as supplemental — a tool that accompanies efforts to use less energy and more renewables, and to invest in projects that help impoverished communities adapt to global warming impacts.

Gössling said he is convinced that carbon offset programs will play a critical role in reducing tourism-related emissions, even despite their flaws and the low consumer uptake. Unlike with electricity, there are few viable alternatives to petroleum-based jet fuel, and long-haul air travel is only expected to rise in future decades. “Since we can’t solve the whole problem by using technology, we’ll have to engage in offsetting,” he said.

Gössling advocates for a mandatory offsetting scheme that would require all airlines to purchase carbon credits and pass costs on to consumers, though he acknowledged the challenges. In Europe, attempts to regulate aviation emissions have already dragged on for decades. Still, he said, the scheme “is the only way I can see into the future, if we are serious about tackling climate change.”