Navigating Carbon Neutrality

Jeff Klein
Jeff Klein

Carbon neutrality is not a phrase that rolls off the tongue, but what it lacks in suaveness it makes up for in importance.

Every time you turn on a lightbulb or an air-conditioner, you are causing some amount of carbon dioxide pollution at a power plant far away. Carbon neutral means that after you make your home and car as efficient as can be, you look at the pollution you are still causing and find a way – by planting a tree in a forest, by buying clean energy certificates – to balance out all of the remaining carbon pollution you cause. In this way carbon neutrality, if practiced universally would thwart the climate-changing gasses like carbon dioxide that pollute our air and oceans.

Carbon neutrality in theory is also not only a great way to improve the world, but also among the most market-efficient way to get there. For example, if it would cost you $10,000 to buy an air conditioner that uses half the energy of your current one, but it only costs $10 to plant a tree that will absorb the carbon dioxide created by running your air conditioner, that is a market tradeoff that keeps the cost of switching to a carbon neutral economy as low as possible. It’s a good deal.

But in practice, carbon neutrality has its challenges.

The first is emotional. For many people, while making their home more efficient feels like a wise investment, the act of purchasing an offset at the airport for one’s upcoming flight feels like buying one’s way out of a problem. In the long-term, offsets can be problematic, because you can’t keep planting trees forever. Eventually there won’t be room for any more but there will still be demand for transcontinental flights. Some have compared buying carbon offsets to the Church’s sale of indulgences in the Middle Ages: buying peace of mind but not addressing the underlying damaging behavior.

Another problem that has made carbon neutrality less feel-good is its reliability. I know that if I turn off a lightbulb, I will reduce the carbon pollution I’m responsible for. I see the light go off. I’ve done something for the planet. But I have much less confidence that that I’m reducing carbon pollution if I donate to some organization I’ve never heard of to plant a kind of tree I’ve never seen in a country whose name I can’t pronounce.

These problems – the guilt factor and the reliability factor – have hampered the push towards carbon neutrality.

But they don’t need to be show stoppers. As we see in this post: Achieving Carbon Neutrality: Offsets, there are many reliable ways to reduce emissions. Carbon allowances are tradable, limited, and measurable pollution permits. Renewable Energy Certificates, too, are tradable, limited, and measurable certificates, but for clean energy production. Methane gas flaring projects are also particularly reliable.

As for the emotional toll of buying your way out of problem, that’s a matter of personal gut, but it’s also worth imagining in the years after your retirement party the look of your grandchildren asking you: “You were hurrying through the airport, you saw kiosk at which to buy the carbon offset. You knew it would take just five minutes and $10 to reduce the environmental impact of your actions. What did you do?”

There’s an emotional toll to not striving for carbon neutrality, too.

Find out how it works with your assets
Get Started
cta