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JOEL MAKOWER: What would you like airline executives to know about offsets that they don’t seem to quite get?

CHRIS WEBB: One is, I think that consumers are rapidly demanding more of companies by way of taking action to tackle climate change. And given the aviation sector’s footprint right now, offsetting could be a really big part of their response to customers. So, I think customers’ requirements and demands of these companies is going to change very quickly.

Second, because of the upcoming CORSIA scheme, offsetting will be a part of how airlines tackle climate change. Getting involved today will build the experience and networks and relationships to allow them to be leaders and succeed when the CORSIA scheme really kicks in.

JOEL MAKOWER: What would you like to see from airlines in terms of them stepping up to embrace carbon offsets more than they’ve already done?

CHRIS WEBB: Part of that is airlines really stepping up and lining up their climate reduction targets with The Paris Climate Agreement. Those targets necessitate deep decarbonization across our economy, including the aviation sector, by 2050. As part of that, we think there is a near-term role, particularly in sectors that are hard to decarbonize, like the aviation sector, in the role of offsetting. We really encourage airlines to think about the role they are playing in the decarbonization pathway that the climate challenge necessitates, and the role that offsetting can provide airlines so that they can play their full contribution in meeting those targets.

JOEL MAKOWER: I imagine there’s also a role for business travelers. For a lot of companies, flying is the biggest part of their carbon footprints. What’s the role that they can be playing?

CHRIS WEBB: There are two things that those sorts of companies can be doing. One is, they need to be setting climate reduction targets that align with The Paris Agreement. Now, that will necessitate a pathway, even within those business flights, that gets them to a place that’s in alignment with that deep decarbonization.

Over time, the aviation sector will need to respond and help those businesses. In a short-term, they can be investing in two things. One is there are increasingly sophisticated technological alternatives to flying. Think about the rise of web conferencing that’s getting better and better all the time. I think that is an opportunity that still has some way to play out in the near-term. But that won’t always remove the need for people to get together. Business is often a very personal interaction. And thus, I think we’re going to see a real opportunity for offsetting in the near-term.

JOEL MAKOWER: You’ve mentioned a couple of voluntary schemes and voluntary schemes haven’t really worked all that well. A very small percentage of airline customers and travelers actually buys those offsets. How do we increase that? Or, is there a whole different mechanism that needs to be put in to place to make them mandatory?

CHRIS WEBB: So, two parts to my answer to that question. I think the first is that, we’re actually starting to see the carbon market coalesce around a couple of standards. I think it’s probably been quite confusing for customers in a very historically fragmented market. There are two standards now in the voluntary market space that, between them, constitute about 80% of the market transactions. That starts to provide a clearer message to consumers about the sort of standards that we can have trust in. And I think that makes it a little bit easier to communicate.

The other part that’s making it slightly easier to communicate is the role of nature as a cost-effective climate solution. We think nature can provide up to about a third of the climate reduction we need to achieve between now and 2030. And the carbon market has been very quick to sense this opportunity. In fact, nature provides one of the largest project types within the carbon market.

One of the things that I think can really help with engaging consumers is the idea of nature, because they can understand nature and a tree in a much more fundamental way than they can some of the other activity types, like those related to industrial processes or waste plants. I think a lot of people have a very personal connection with nature and trees, and I think we can use that to engage consumers in a much more meaningful and powerful way than we have historically.

JOEL MAKOWER: You mentioned some standards for carbon offsets. The fact that there’s more than one standard alone kind of bothers me; but, talk a little bit about what standards companies should be looking for.

CHRIS WEBB: Your point about the number of standards is quite right, and I talked about two in the voluntary space. In fact, if you’re a company right now and you’re global, you may well be having different carbon standards if you’re also part of regulated carbon pricing schemes around the world, maybe in California, maybe in Columbia, maybe in South Africa, maybe in China – each of which have their own carbon standards as well. So, it’s a very diverse market that companies face when they’re thinking about, “What’s my role in carbon offsetting around the world throughout my value chain?”

I think what companies should be looking for are offsetting standards that comply with a number of pretty well-defined and understood criteria. They need to ensure these projects are real. They are additional. These aren’t activities that would’ve happened anyway because carbon finance needs to be resulting in a net benefit to the environment that wouldn’t have happened anyway.

They need to be permanent. One of the things that we have developed in the last decade or so are some very sophisticated tools that give us a huge amount of confidence that, particularly in nature-based offsets, which in the past there was some hesitancy around whether you can ensure permanence…now, we have the tools to do that.

JOEL MAKOWER: What about the skepticism that exists around offsets and some civil society organizations, not necessarily The Nature Conservancy, but others that consider offsets to be greenwashing? How do we overcome that?

CHRIS WEBB: We need to set some really clear boundaries around when offsetting is an appropriate tool or not. This isn’t, and cannot be, about greenwashing. In fact, we think offsetting offers an opportunity for companies to raise their ambition, and that this is a tool that enables them and, in fact, necessitates them to do more.

There was an analysis done by the Carbon Disclosure Project a few years ago, which is where companies report their greenhouse gas emissions and what action they’re taking to tackle those emissions in their companies. And what that data showed was that, those companies that offset also had the most ambitious climate reduction targets and were taking the most action on climate change.

JOEL MAKOWER: There’s a movement taking place in some parts of the world where they’re pressuring people to fly less. Is that part of the solution?

 

CHRIS WEBB: I think it’s consumers. We all have decisions that we make on a daily basis that can influence how well we’re tackling climate change. So, I think it’s incumbent upon us all to think about those choices, including in terms of the flights that we take. But we also, I think, need to be careful that we don’t make the solutions to climate change seem less palatable to consumers, individuals, and companies than the world we have today, which is why I think all of those other tools are going to be critically important to ensure that aviation can still play its role in the global economy in 2050.

JOEL MAKOWER: Some airline executives are taking a wait-and-see approach when it comes to offsets. They’re waiting to see what kind of mandates, regulations or other things come along, and also waiting to see what leadership and their peers are doing before they jump in. What should they know about in terms of when they should step in and embrace offsets?

 

CHRIS WEBB: I think there is an opportunity for airlines to embrace offsets today. I think there are some quite important commercial reasons for why that makes sense. We know that through the CORSIA scheme, offsetting is going to be a really important part of how each airline manages its climate impact over the coming decade or so. And in fact, this is a market that is still somewhat complex and that has a very dynamic environment where one needs to learn about new standards, new methodologies, new market drivers and dynamics.

Our advice to companies, airlines included, is that you know this is coming. We think that those airlines that will succeed once the CORSIA scheme hits are those that have got in early and understood what it takes to generate high integrity, at-scale offset projects and have built the expertise and relationships and networks to do so.

JOEL MAKOWER: What should airline executives be doing today?

CHRIS WEBB: Well, I think the first is recognize the context of your business and how that is changing and will change in the coming years. Consumer demands of companies are changing very rapidly. And policy and regulation around tackling climate change in the sector is also coming down the line. And so, aviation executives should be understanding this context, planning for it, and acting now to make sure that they can be the leaders of tomorrow.

JOEL MAKOWER: So, there’s an advantage to being an early adopter?

CHRIS WEBB: Absolutely. This is a market that is a relatively new space for many airlines to think about as a core competency. They will need to build new experience, new expertise, new relationships and networks. There are huge benefits in building that now so that they can be the leaders of tomorrow.

 

Check back for the next post in this series about the future of the carbon market and the aviation industry’s sustainability goals.