Carbon offsets are confusing, and many people wonder how—or if—they even work. Hoping to find a more guilt-free way to travel, frequent flier Tim Neville heads to the ranchlands of Montana to see what an offset looks like on the ground. Hint: it involves cows.
I’m looking at a trench on part of a 7,500-acre ranch outside Big Timber, Montana. It is February. Swollen, purple clouds roll over the pastures.
Ranch owner Kevin Halverson, 70, spent the morning shoveling snow out of the trench. It is roughly as wide as a man and shoulder deep and was cut for a new two-inch pipeline that now snakes for more than five miles across his fields. The water will allow his cattle to graze the land in a more intensive way.
Halverson is wearing a jacket shredded at the elbows, and his cheeks burn like alpenglow on the 11,000-foot Crazy Mountains in the background. This is backbreaking work.
“I may have abused this land more than I should have, trying to make my payments,” Halverson says. Faced with so much overhead—land and equipment leases, in addition to the cost of power, weed removal, and disease treatment for livestock—today many ranching families need an extra source of income to stay afloat.
Halverson climbs out of the trench and looks around. Pickups. Cows. A scar of freshly turned earth. The pipeline will bring water to tanks stashed among the thirstier corners of his ranch, which will allow him to run more cattle and earn more than he could before. But the trench does even more than that. Thanks to the pipeline, Halverson can now harvest carbon out of the sky and be paid for it.
“For ranchers of my age, this is, like, something from Mars,” he says.
The Halversons are one of four families in Montana behind a new effort called the Montana Grasslands Carbon Initiative, which seeks to pay ranchers to fight climate change by letting the grasses grow tall across their rangelands. If you change the way cows graze, the thinking goes, you can give huge swaths of chewed-up grasslands time to regrow properly. More grass means more photosynthesis, the process plants use to convert light energy into food. More photosynthesis means more carbon dioxide is siphoned out of the atmosphere and excreted back into the earth as organic compounds. That makes the soil richer with nutrients, oxygen, and water, which in turn leads to healthier grasses.
Scientists can measure how much carbon the grasses are converting, too, and every metric ton (about 2,200 pounds) of that sequestered gas has a value derived from a demand to not have it floating around the planet. The strange, complicated world of carbon offsets turns that greenhouse gas into a commodity worth real money.
Standing next to Halverson and his very long trench, I was more or less witnessing the birth of an offset. Until then, offsets had seemed abstract and intangible to me. As an avid traveler, how many times have I been asked to offset my flights, offset my Lyft, offset my attendance at a conference? Does spending $7.22 to offset a round-trip flight from San Francisco to Kauai really do anything for the environment?
Here, I can see the dirt on Halverson’s gloves and the snot cooling in his nose. I can fathom how the promise of a carbon payment and healthier soil could reduce his overhead costs and shorten the road to profitability. Also, getting a check to fight climate change? “That’s gravy,” he says.
To limit global warming to about 3.6 degrees Fahrenheit over preindustrial levels, scientists at the International Energy Agency say the world needs to slash global emissions to less than 20 billion metric tons a year by 2050—down from 33 billion in 2019—and down to zero by the end of the century. (Even then, we’ll still likely have more droughts, severe floods, and destructive storms.) Offsets will play a role in flattening that curve. Some state governments may follow California’s example and create policies that by law require certain high-polluting industries, like power plants, to offset their emissions. Other companies, like REI, buy offsets voluntarily, because their customers want to support an environmentally minded brand. In between lies a complex scheme where a traveler looking to take a guilt-free trip can get pretty lost.
“People assume all carbon offsets are the same, and that’s absolutely not true,” says Paul Gambill, founder of a Seattle-based carbon-trading company called Nori. “There’s not always a good link between the offset and, OK, what does this even mean?”
To figure that out, Montana’s a great place to start.
Outside correspondent Tim Neville writes frequently for the magazine and other large publications, like The New York Times. He lives in Bend, Oregon, where he skis Mount Bachelor as much as he can.
Rancher Kevin Halverson and his new pipeline trench
Rancher Kevin Halverson and his new pipeline trench (Photo: Courtesy Tim Neville)
At their simplest, offsets are a way to commodify taking carbon and other greenhouse gases out of the atmosphere. Some types of offsets fund projects that remove gases already released into the air, like planting trees or restoring grasslands. Others support projects that stop greenhouse gases from being released in the first place: cap a landfill with layers of clay, plastic, gravel, and soil, and the methane emissions you prevent from entering the atmosphere can be sold as an offset that’s assigned a dollar figure.
Offsets have existed since the 1980s, and while there has been volatility in the markets since 2008, they are growing into a significant business. In 2018, the World Bank and carbon finance groups found that offsets generated revenues of nearly $45 billion worldwide, up more than 33 percent over 2017. Utility companies and fossil-fuel industries have been the biggest players in buying offsets. But the travel and outdoor industries are jumping in, and none too soon.
If U.S. airlines alone were a country, they’d rank sixth in the world as the biggest greenhouse-gas emitters. Starting in July 2020, JetBlue became the first airline to buy offsets to cover all of its fuel emissions for every domestic flight—some seven million metric tons’ worth each year. Airlines like Alaska, Delta, and United offer customers an option to pay extra to offset their own trips. In September, REI announced that it will offset its entire footprint every year starting this year, and the North Face and Patagonia both invest heavily in offsets. Recently, the Adventure Travel Trade Association, which provides leadership and conferences for the adventure travel industry, launched Neutral Together, a collective bulk-buying offset program for outfitters.
“We have this massive moment right now,” says Austin Whitman, CEO of Climate Neutral, a company that helps outdoor businesses like Klean Kanteen, Ombraz, and REI reduce their emissions and offset the rest. “People know climate change is a huge problem that needs to be solved, but they don’t know what to do about it. This space is very technical and generally not consumer friendly at all.”
He’s right. The business of offsets isn’t easy to understand. It basically comes down to two options: mandatory government-run compliance markets or voluntary schemes. The compliance market is when a state or national government sets a limit on the emissions a company can produce by awarding credits for those emissions. Companies can then buy and trade those credits to account for the greenhouse gases they’re releasing. This is called a cap-and-trade model, like the one California has been applying since 2013 on large electric power plants, industrial plants, and fuel distributors, who produce the lion’s share of the state’s greenhouse gases. For companies, this approach can get expensive fast, so the hope is that they will begin to seek ways to produce less carbon.
The voluntary scheme is more market driven, with prices set by supply and demand. With this approach, a company voluntarily chooses a way to counter the amount of greenhouse gases it produces, most often by investing in projects that remove carbon from the air, like massive tree plantings or a methane cap on a landfill.
Many ardent climate-change fighters say that of the two systems—compliance versus voluntary—they would pick compliance, because it’s legally binding, more accountable, and can fund larger emission-removal projects that expedite the cultural and lifestyle changes needed to reverse warming trends. Others say that voluntary markets, which raised $295 million in global revenue in 2018 (less than 0.7 percent of compliance-market revenues) work great because they’re a stepping stone between where we are now and where we need to go. Halverson and his cows are part of a voluntary scheme.
The voluntary approach has other benefits, too. “Everyone cares about climate change right now, but in buying an offset, you might also be protecting wetlands, saving biodiversity, or helping farmers earn a livable wage,” says Anastasia O’Rourke, managing director of Yale Carbon Containment Lab. “They have all these other environmental or social benefits.”
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