Connect with us

Published

on

Israel’s bombardment of Gaza in response to Hamas’ October assault on Jewish civilians is prompting much soul-searching. One reappraisal that caught my eye was Who’s a ‘Colonizer’? How an Old Word Became a New Weapon, which ran earlier this month in The New York Times.

The piece, by veteran NY Times correspondent Roger Cohen, centers on two opposing ideas — clashes, if you will. One, particular to the current war, concerns the charge that Israel is an outpost of “settler colonialism” and the counterclaim that the Jewish state, “far from being colonialist,” in Cohen’s words, “is a diverse nation largely formed by a gathering-in of the persecuted.” The other is what Cohen calls “a fundamental reframing” of history away from an East-West conflict canonized in the American and French revolutions, toward a North-South struggle “focused on the millions of lives lost to the slave trade and the genocide of the native American peoples.”

The scene in San Francisco on Sept 10, 2018 as activists with the Climate Justice Alliance demonstrated outside California Gov. Jerry Brown’s Climate Action Summit.

Cohen’s grappling with colonialism and colonization took me back to 2018 and the image shown at left. Outside a “Climate Action Summit” convened in San Francisco by Jerry Brown toward the end of his fourth and final term as governor of California, activists from the Climate Justice Alliance hoisted a banner proclaiming “Carbon Pricing Is Colonialism.”

To me, the message was shocking but not surprising.

Shocking, in equating carbon pricing — an admittedly technocratic but singularly powerful policy tool for cutting carbon emissions and, thus, aiding vulnerable nations and communities considered most gravely threatened by climate chaos — with the centuries-long colonial project that subjugated and plundered the Global South to benefit the colonizing North, and whose psychological and financial toll endures.

Unsurprising, in light of the climate-justice movement’s embrace of intersectionality, and with it, conflation of carbon pricing with predatory capitalism that, over centuries, bestowed riches on Europeans and North Americans by stealing the lands of Indigenous people, the labor of people of African descent, and the mineral resources of the entire Global South.

What Is Colonialism?

Wikipedia usefully defines colonialism as “a practice by which one group of people, social construct, or nation state controls, directs, or imposes taxes or tribute on other people or areas, often by establishing colonies, generally for strategic and economic advancement of the colonizing group or construct.”

Notwithstanding Wiki’s disclaimer in the same paragraph that there’s “no clear definition” of colonialism, this one is distinct and, with its reference to taxes, pertinent.

How Carbon Taxing Actually Works

Suppose carbon emissions were taxed in every country. Would that entail colonizing of poor nations by the rich? It could, but only if the carbon-tax wealth — the revenue generated by the tax on carbon emissions — was siphoned off by the rich countries.

There is no carbon-taxing or pricing system under which that would take place.

Keep in mind that carbon taxing is a charge on carbon emissions. If Country A exports fossil fuels to Country B, the carbon tax arises when the fuels are burned, which takes place in Country B. The tax is imposed in and collected by Country B, and the revenues adhere to Country B.

What about Country A? Its carbon tax applies to fuels burned there — to power vehicles, to generate electricity, to run factories, to heat buildings, and, yes, to operate the machinery that extracts the fossil fuels from the ground and brings them to docks for export. Each of those combustion processes generates carbon emissions in Country A which will be taxed by Country A and whose revenues will stay in Country A.

There are genuine debates to be had as to how Country A, the exporter, will spend its revenues, just as there are or should be debates in Country B concerning disposition of its carbon revenues. Nevertheless, under no conceivable carbon-pricing regime will revenues from Country A’s carbon tax flow to Country B.

Where in this picture is colonialism?

Is it in the prospect that taxes on carbon emissions in Country B and other importing countries will cut demand for Country A’s fuel exports . . . which will lower demand for Country A’s fuels and depress its commerce in extracting and exporting fossil fuels? No. This lowering of demand is part of the intent of taxing carbon — “a feature, not a bug,” per the expression.

Shrinking global demand for carbon fuels and thereby reducing Country A’s carbon commerce isn’t colonialism. It’s not a coercive transfer of wealth or imposition of tribute. Rather, it’s part of how the world cuts emissions and protects the climate, accomplished entirely by and under the control of Country A.

The Colonial Adjacency of Carbon Offsets

Carbon offsets are accounting devices to enable “polluters,” who may be countries, companies or individuals such as air travelers, to avoid having to reduce their own emissions, by purchasing offsets or “carbon credits” that ostensibly cut emissions elsewhere, e.g., by planting trees or destroying greenhouse chemicals like Freon. Plagued from the start by the rap that they are little more than get-out-of-jail-free cards for the Global North, and further undercut by repeated evidence of fraud, carbon offsets have not only hindered effective climate action but have also ended up sullying the cause of carbon pricing.

We tweeted this after seeing the activists tweet their banner on Sept 10, 2018.

The Carbon Tax Center’s website section on carbon offsets recounts their history and controversy. Suffice it to say that offsets’ ties to various carbon cap-and-trade programs such as the European Union’s Emissions Trading System and California’s AB-32 carbon cap-and-trade program have led climate-justice campaigners to condemn not just offsets or carbon cap-and-trade but any proposed or actual form of carbon pricing — even straight-up carbon taxing with no offsets whatsoever.

What the Colonial Powers Owe Their Former Colonies

Let’s be clear that the developed countries owe an immense debt to the Global South for exhausting most of our planet’s carbon budget: trillions for climate adaptation; massive financing for clean-energy infrastructure; and large-scale technology transfer. Sweeping debt forgiveness would help as well. These obligations are, or should be, compulsory. But they have nothing to do with carbon pricing. They certainly won’t be exacerbated by taxing carbon emissions whether in the Global South or North. Rather, the emission reductions that carbon pricing will spark will buy time for former colonies to manage, adjust and thrive as the payments, financing  and technology ramp up.

Carbon Pricing is Anti-Colonial

We conclude this with its headline. Carbon pricing is utterly and intrinsically anti-colonial. Nations levy their own carbon price and collect the revenues, which they allocate or invest as they see fit.

It’s not perfect. No policy is. And it’s not a silver bullet. When it comes to protecting and restoring climate, there’s no such thing.

But carbon taxing promises huge reductions in carbon emissions — 30 percent or better within ten years if ramped up steadily, in the case of the United States. And it’s complementary with virtually every other carbon-cutting action, be it regulatory, investment, or even clean-energy subsidization, to go far beyond that 30 percent mark. Moreover, pathways abound for allocating, or, our favorite approach, dividending the revenues to keep whole the vast majority of the most-vulnerable households

Carbon pricing is a policy path any nation can undertake on its own and manage as it chooses. If that’s not the essence of political autonomy, what is?

Environmental justice misgivings about carbon pricing, and antidotes to same, are discussed at length on our Carbon Pricing and Environmental Justice page.

Carbon Footprint

Insetting vs Offsetting: Which Actually Counts Toward Your Scope 3 Targets

Published

on

The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.

The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.

This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.

The two definitions, in plain English

Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.

Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.

The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.

What the GHG Protocol Land Sector Standard actually says

The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).

For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.

For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.

A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.

When insetting counts toward Scope 3 (and when it does not)

Insetting counts toward Scope 3 only when several conditions are met:

  • The intervention must occur with an entity in your value chain.
  • The emissions reduction or removal must be measured against a defensible baseline.
  • The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
  • It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.

The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.

When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.

The procurement and supplier engagement question

Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.

To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.

The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.

Choosing the right tool for the right target

A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.

The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.

If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.

Continue Reading

Carbon Footprint

Net zero needs nature: a carbon credit guide

Published

on

Net zero is often described as a balancing act: cut what you can, account for the rest, and reach zero on the ledger. That framing is useful, but it leaves something out. It treats every tonne of carbon as interchangeable and every route to zero as equally sound, while the science tells a more specific story.

Continue Reading

Carbon Footprint

Deforestation in Malawi: causes and solutions

Published

on

Malawi has lost a striking share of its forests over the past three decades. Woodlands that once covered well over a third of the country now cover less than a quarter, and the pressure on what remains is increasing. Behind those figures sit two practical questions: what is driving the loss, and what reverses it?

Continue Reading

Trending

Copyright © 2022 BreakingClimateChange.com