REVIEW OF DEFRA CONSULTATION ON ESTABLISHING A CODE OF BEST PRACTICE FOR CARBON OFFSETTING
On 18 January 2007, the Department for Food and Environmental Affairs (DEFRA) published a comprehensive 53 page consultation document asking for views about best practice for carbon offsetting in order to 'give consumers the tools and information they need to make decisions, relevant to their lifestyles, on how they can help tackle this issue'. In order to achieve this DEFRA proposes a code of best practice with a logo for accredited offset products. My review looks at the implications of the DEFRA proposals for tour operators and travel agents - and their customers.
It is right and proper that the government should take an interest in the mushrooming carbon offset business. There are many concerns and few safeguards in that anyone can offer to offset the impacts of flying and other forms of travel and over 40 different offset providers have approached operators and agents with various schemes. It is not my place to question these offset companies which are in any case a subject of an enquiry into the voluntary offset market being undertaken by the Government's Audit Committee.
The DEFRA proposition very much mirrors the current Government Carbon Offsetting Fund mechanism whereby all officials and Ministers travelling on government business contribute to a portfolio of projects under the Kyoto Protocol Clean Development Mechanism (CDM). These projects which are classed as certified emissions (CER's) are described by DEFRA as 'robust' because they sit within a tightly regulated framework.
Essentially what DEFRA is recommending is that companies buy CER's from an approved company in the same way that you would buy a commodity. Many industries already work in this way as a part of their duty or responsibility under the EU emissions trading scheme. Air travel is currently not part of this scheme but is proposed for inclusion in the future.
This system has much in its favour, particularly for large companies. You simply buy a tonnage of certified CO2 offsets at the market price. This price may vary but the DEFRA central estimate for CER's is currently £16.90 per tonne. So, if you and your customers only want to make a commitment to reduce the carbon cost of your holidays buying CER's is a simple option and will I am sure be well managed - if a tad expensive in management costs.
DEFRA does not favour the current entrepreneurial approach which is based upon voluntary emission reductions (VER's). There are both political and practical reasons for this. VER's do not "count" towards the EU emissions trading scheme figures and as we overshot our targets for this in 2005 we (the UK taxpayer) had to buy £470 million of permits from other member states. This created a 'black hole' for the Chancellor and cynics might conclude that this has been filled by increasing APD! Promoting CER take up will hopefully reduce this tax burden. Also as VER's do not count towards Kyoto commitments there is no common way to measure them.
For these and other reasons the government feels that at this time VER's do not provide a suitable basis for offsetting best practice. I disagree with this assumption.
In the travel and tourism field the whole basis upon which responsible tourism (RT) has developed has been voluntary by nature. Many operators and some agents have worked hard to develop sustainable projects and organisations like AITO have well developed RT policies and practices. Indeed the industry has formed its own RT organisation in the Travel Foundation.
It is my view that the impact of climate change (resulting mainly from CO2 emissions) is one of the most important challenges facing mankind. My view has not changed since the Club of Rome published Limits to Growth in 1972; it has just taken governments about 30 years to wake up and to start to do something about it. Without diminishing this global threat, it is how we respond to it that is important. Offsetting and CO2 reduction is not a solution to climate change but it will buy us a bit of extra time to find the necessary solutions to develop non fossil based technology for our energy needs. I have written more widely about the methodologies for dealing with climate change in 'Battling Climate Change'- available for viewing on the news section of this website.
My advice, based upon over 30 years of experience in this field, is that all operators and agents should offer a carbon offset service to their customers where they can but that this should reflect other RT benefits as well. Let me give an example. Under the CER system about a half of current schemes are large buy outs of coal fired energy producing systems in countries like China and India. For a tour operator or agent, particularly if you can just raise a few hundred or thousand pounds, there is no relevance or resonance in this. On the other hand if for example you sell holidays to Africa by using VER's you could support a TICOS project which would buy a few solar powered panels to provide light and heat for an African family, compound or village currently burning kerosene (which is expensive and has appalling health consequences). Which would you prefer to do? Because the latter is a voluntary unregulated project it would not fit the governments 'compliance' criteria but it would have more benefits that resonate with the travelling public.
Those of us who have formed TICOS have done so because we strongly believe that we can achieve good carbon reduction targets and at the same time provide social, economic, environmental and pro poor benefits as well. The key is that CO2 reduction is a part of a bigger picture in RT and the fact that a very good project has a relatively high cost per tonne of CO2 saved should not mean that we should not support it because it does not meet the UK government's standards.
Although the Government claims that VER's do not have the basis for best practice I strongly disagree with this. AITO, ABTA and FTO are voluntary membership organisations that are well managed and run on the basis of best practice. TICOS operates to a very high standard of integrity and due diligence and as we separate functions our independent verification is truly that. Best practice is not a government prerogative!
It is clear to me that the governments preferred methodology does have merits for some industries and some companies where there is no particular affinity with customers or with destinations. If you are for example an energy provider in the UK or make bathroom fittings for B&Q you probably do not have a direct and personal relationship with your customers and have no particular commercial interest in other countries.
Tourism is different to a lot of other industries. Many tourism companies have loyal customers and good relationships with those in the destinations they sell. Customers are interested in what happens in these destinations. It seems a natural conclusion that if you are collecting an offset contribution on behalf of your customers for their holiday cost they would like it to go to a project which they can identify with in countries and locations they visit.
That is why we have designed TICOS in the way we have. We want to give operators and agents and their customers the option to choose where they want their offset funds to go. In my view such a relationship will encourage more customers to make a contribution than would give to a CER scheme funding a reduction in coal burning in China or India.
I can see no reason why the government has to discourage voluntary schemes in favour of regulated schemes. I would much rather that they developed policies which encouraged both. If new standards are needed in the VER sector so be it. As long as they work for the good of the consumer and work well for concepts like TICOS then CER's and VER's should be equally acceptable and form the basis of choice.
If the net result of having both CER's and VER's working to complement each other is that more people contribute and more carbon reduction takes place then surely this is in everyone's interests?
Dick Sisman
Founder of TICOS
AITO RT Advisor
29 January 2007