08 October 2019
Why Steenbergs Is Pausing On Carbon Offsetting?
Steenbergs has paused with carbon offsetting because we believe it was making us making the wrong decisions for the planet. We explain the details of why?
Last month at Steenbergs, we replaced our old light fittings and replaced these with LED lights and, also, increased the number of motion sensors that we have around our buildings to ensure that no lights get left on in cupboards. Also, we have turned the settings on the sensors as low as possible, so they only go on when the natural light is low.
This should save about 2 tonnes CO2 every year, or 11% of our current greenhouse gas emissions.
At the same time, we have decided to stop carbon offsetting. I want to explain why.
Basically, we realised that carbon offsetting is too cheap, so forces business to make the wrong investment decisions in relation to climate change. Also, carbon offsetting was hiding the actual emissions Steenbergs was adding to the atmosphere, by masking these through paying a fee. Effectively, carbon offsetting is a licence to pollute if you can pay the nominal fine.
To put this into numbers:
- Steenbergs emitted about 18 tonnes CO2 last year, which is roughly equivalent to the average UK family;
- To reduce this by 2 tonnes CO2 a year through the LED lighting project cost us c. £5,000;
- But to carbon offset 2 tonnes CO2 is a tiny £15 per annum;
- So, if we assume the lights last for 20 years, then the current value of this annual £15 cost is slightly less than £200;
- This means that financially you should always offset rather than invest in the LED project, because it is the cost of £200 versus £5,000;
- But from a climate perspective, you should always do the LED lighting project rather than export our climate impact. And traditional business decision making methodology is flawed.
That is why we are currently not so positive on carbon offsetting as it has been resulting in Steenbergs making the wrong environmental decisions. Perhaps we will need to revisit this again in the future, but, in the meantime, there are a lot of better environmental actions we can take that exporting our carbon costs to the developing world!
Why do we think there is this big mismatch?
In a nutshell, carbon is too cheap in the market – it is about £13 per tonne versus a social cost of c. £160 per tonne. Until carbon is priced above £100 per tonne, the private sector and consumers will not be impacted by the true cost of carbon, so behavioural changes within the private sector will not be made that will save our planet. So, in Steenbergs little project, classical investment decision making gives the wrong answer for the environment.
On the other hand, the answer is not regulation, because until we are given viable choices that reflect the true cost of carbon, there will be no meaningful collective move towards a decarbonised lifestyle.