Issue and Options 2023

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It is important that in any offsetting program, there are clear limits set on the conditions under which offsetting is permitted, and the type of project which can be allocated carbon credits. If this is not done, offsetting has the potential to do more damage than good. Where carbon offsets are cheap (as they are at present) it is important that cash-rich developers are not allowed to purchase them as an alternative to achieving buildings that are net zero in use. Thus there needs to be some eligibility criteria for assessing whether emissions are genuinely "hard to offset". Offsets purchased for emissions that it is possible to reduce or balance by other means should not be recognised by the Councils. What is and is not "hard to offset" may also change with time, as technological and infrastructural conditions change, and this will need regular reassessing. This implies the need for the Councils to acquire expert knowledge of industry and construction, to supplement its plans. Only a project that generates net negative carbon emissions can be genuinely considered to offset emissions. If a carbon credit is allocated for a project that only reduces carbon from a polluting source (e.g. efficiency programs) then when that credit is sold, that allows the purchasing company to add those emissions reductions to its own balance sheet only at the cost of taking them away from the selling company. In other words, the emissions have not genuinely been offset, only moved. Moreover, the company that in practice achieves the reductions, which may be doing all it can to reduce emissions, is then marked down as having high emissions, while the company buying the reductions may still in practice be releasing emissions that could easily be reduced. The reallocation thus potentially disguises the capacity for further reductions. So only net negative projects should be considered to provide authentic offsets. This also again underlines the importance of the previous point. It may be worth incentivising projects that merely reduce carbon emissions in other ways, but the council should be aware of the possibility that incentives given to polluting schemes with reduced emissions might actually make antiquated forms of infrastructure viable, where they would otherwise be economically outcompeted by genuinely low carbon/renewable alternatives. Benefits from any project will rely on the Councils' ability to monitor whether offsets are actually achieved (e.g. do the saplings actually grow, or do they die after a year?), and to impose penalties if they are not. And obviously this goes for emissions reductions projects in general, not just offsets. The Councils therefore need to develop robust and well-funded systems for monitoring such projects. This might potentially require an increase in government funding, though monitoring techniques involving satellite imagery and AI may help reduce costs. The Councils should therefore develop proposals for what such a monitoring and penalty-imposing system would look like, and make lobbying for the funding it requires a regular part of its lobbying strategy vis-a-vis central government. Monitoring offsetting projects will be easier where the projects are local. This should therefore be taken into account in the design of these projects, perhaps through working with the County Council to influence local offsetting schemes they are developing. There are only a limited number of trees and hedgerows that can be planted, soils and wetlands restored etc, and the achievements of carbon capture technology seem likely to be very limited in the all-important coming decades. There will therefore be only a limited supply of offsets available, and in principle these should be allocated on a technical basis, to match those projects that are genuinely hard to reduce (e.g. emissions from a - hopefully reduced - number of long haul flights, or from cement production). Allocating them on an economic basis, i.e. to whichever company has enough spare cash lying around and considers it economic to purchase offsets, potentially contravenes this aim. It may be that there are clever ways of designing the scheme to align economic means with technical aims, but the likely complexity of such a scheme may invite unintended consequences and the exploitation of loopholes. It therefore seems that offsetting in carbon markets might achieve some benefits in the short term, as a way of acquiring funds for nature restoration programs, but they could potentially be a hindrance in the long term, insofar as they fail to properly allocate offsets to emissions genuinely needing offsetting. We would suggest that the Councils view any offsetting policy as transitional, and in need of regular review.

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It is very good that the Councils have increased their ambitions from the previous iteration of the SWLP, and are now talking about net zero carbon buildings. It is important to specify the standards by which achievement of this aim will be assessed, and the Councils should do this. Experts in sustainable building standards typically emphasise the following: All new buildings must be truly net zero carbon in use, without offsetting, and this must include both regulated and unregulated energy. To achieve this, all new buildings should be built to the Passivhaus standard – this will get them to zero carbon ready. If they are to the Passivhaus Plus standard (which includes solar panels) they will be zero carbon in use now. The Council should also specify standards for Building Performance Evaluation (POE). For all new developments the 12 months old BS 40101 Building Performance Evaluation must be applied. All retrofit should be undertaken to the PAS 2035 standard, for domestic buildings, and to PAS 2038 for non-domestic buildings. Solar panels and heat pumps (or alternative net zero-ready heating system) should be required in all new buildings as a matter of course, unless there is good reason not to. The cost of solar panels is a small fraction of the price of a new building.

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