What Is Carbon Insetting?

A car manufacturer plants a mini-forest outside its new factory. A hotel chain funds the creation of olive groves and then buys back the olive oil. A restaurant deliberately buys from farmers who prioritize soil carbon sequestration.

This may be the latest incarnation of climate-conscious business practices, and it's called "carbon insetting."

Back in the heady days of "An Inconvenient Truth," carbon offsetting became a common term in the business and consumer worlds. The concept was simple: even though we will inevitably emit carbon dioxide and other greenhouse gases during the course of doing business or going about our daily lives, we can calculate and then "offset" those emissions by funding tree planting projects or renewable energy initiatives elsewhere. As part of a broader climate strategy, the idea has some value. After all, we're unlikely to jump to zero emissions overnight, and offsetting allows us to address the lowest hanging fruit first, making savings and reductions where they are most cost-effective as we wait for wind, solar and other technologies to become competitive.

But this concept didn't convince everyone.

Likening the idea to papal indulgences, critics argued that consumers and businesses were paying to absolve their guilt without having to make structural changes to fundamentally unsustainable business models or lifestyles. The idea of carbon insetting is to take this process and bring it closer to a business or organization's direct sphere of influence. If you regularly buy agricultural products, for example, why not support initiatives that plant trees and promote agroforestry as part of bolstering your supply chain?

Tim Smedley at The Guardian has a useful overview of the growing popularity of carbon insetting. Looking at the work of Plan Vivo and Pur Project, which both focus on tree planting schemes, Smedley explores the similarities and differences between offsetting and insetting:

The appeal of offsetting for some businesses, however, is that it’s simple and done at arm’s length. Insetting by contrast sounds like a lot of work. “Initially it could be quite a challenge for businesses if that’s not how they typically operate,” says Christopher Stephenson, director at Plan Vivo Foundation, who recently ran a one-day capacity-building workshop on insetting. But he relates the experience of one business: “Offsetting for them was an expense, it was a cost line. They recognised that that could become a more strategic investment for the company. Instead of being a simple cost on their balance sheet, they can actually transform that into an investment, plus a fantastic communication and marketing tool.”

Beyond tree planting, Smedley also points out that insetting can potentially encompass a broad range of activities, many of which were already a part of companies' sustainability arsenal.
When Cisco Systems, 3M and Kimberly-Clark offer cheap solar power as an employee benefit, they aren't directly reducing their own corporate environmental impact, but they are generating real emissions cuts while investing in their employees and (presumably) increasing their employee satisfaction rates. Similarly, when NASA supports electric car use among employees, it might be focusing on emissions outside of its direct control, but it is cleaning up its surrounding environment and saving its employees' money. If these entities were to quantify these saving, and then apply them as "carbon credits" against their company-wide emissions, they'd be moving into this sphere of insetting.

Just like any strategy, insetting is not without complications. Indeed, in a Skype call, Christopher Stephenson of Plan Vivo explained to me that this is not an either/or debate about insetting versus offsetting, but rather both are useful weapons in a much broader arsenal. While insetting may help companies to invest in their supply chains, for example, some companies may be worried about a lack of flexibility. What happens if they need to switch suppliers or phase out a particular product? While offsetting provides convenience and economic efficiency, insetting provides a deeper engagement and an opportunity to add value to the supply chain, potentially also reducing a company's vulnerability to climate-related risks like severe weather or crop failure.

Both have their advantages. Both can be a useful strategy.

From increasing the use of shade-grown coffee to promoting the practice of carbon farming among suppliers, an increase in carbon insetting could have a powerful impact on changing entire supply chains. Of course insetting does not negate the need for direct carbon reductions, but I doubt any serious player in the growing movement would ever claim it does. Just like carbon offsetting, insetting can only ever be part of a much broader push for emissions reductions that includes direct investments in efficiency, conservation and renewables; a shift away from fossil fuel investment and use; and a growth in advocacy for a low carbon economy.

With large corporations unplugging from the grid and businesses distancing themselves from anti-renewables lobbyists, many parts of the puzzle are coming together. With the rise of carbon insetting, we're one step closer to an emission-free future.

For those interested in learning more, below is a video overview from 101 Visions. You can also download a manual on carbon insetting for business at the Plan Vivo website.