Report says carbon offsetting needs code of practice

By Gerard Wynn

LONDON (Reuters) - Carbon offsetting has a role to play in fighting climate change but urgently needs a code of practice, an environment committee of British parliamentarians said on Monday.

Voluntary offsetting involves individuals and companies paying others to cut greenhouse gas emissions on their behalf. It is unregulated, and so distinct from a mandatory international scheme under the Kyoto Protocol.

"Without transparency, consumers will have little confidence in purchasing or otherwise dealing in offsets," the report by the House of Commons Environment Audit Committee said.

"The government must act quickly," it added, while criticising as too restrictive a recent British proposal to tie the voluntary market to the existing Kyoto standards.

"This unnecessary restriction could seriously affect the growth of the (voluntary) market," it said, adding that the regulated market had for example largely bypassed emissions-cutting projects in Africa, something the voluntary market could redress.

Illustrating the need for standards, the report cited one voluntary offset project where lack of water killed plants which had been intended to absorb carbon dioxide and offset greenhouse gas emissions from concerts by Coldplay.

Another concern is that offsetting delays more fundamental efforts by companies and individuals to cut their own greenhouse gas emissions.

The report cited evidence from the World Development Movement that monthly carbon emissions by HSBC rose in 2005, the year that it said it went carbon neutral. Going carbon neutral means offsetting all your emissions.