Carbon offsets could counterbalance some of the environmental damage of human activities, including that of short and long-haul flights. But do they actually deliver on this promise? In this edition of Disruptors: The 10-Minute Take, co-host Trinh Theresa Do casts a critical eye on the voluntary carbon market, specifically, carbon offsets. She’s joined by Suha Jethalal, President of Bullfrog Power, who explains how these credits work, and what consumers should think about when buying them.

Episode Notes:

To learn more about Bullfrog Power or their subsidiary, visit their website.

Speaker 1 [00:00:02] Hey, it’s Theresa. All of us contribute to the global climate crisis. Everything from the planes, trains and automobiles we travel on, the food we eat and the buildings where we work and live all produce greenhouse gas emissions. And I know you’ve heard a lot about how important it is to reduce GHG emitting activities and to change our lifestyles. But it can be hard, really hard, sometimes even really expensive. And there are just some activities perhaps based on where you live or your personal needs that can’t be realistically cut out of your life. But there is a way to help counterbalance some of our emissions and climate damage. Enter carbon offsets, make a purchase online, also draw emissions for that particular purchase, book a flight and offset the carbon generated from your seat and travel length on that flight. The list goes on. But are these voluntary offsets a viable solution or just greenwashing? This is disruptors, the ten minute take where we dove into the latest innovation, tech and economic buzz. This week’s take is on carbon offsets. What are they? How do they work and how do we know if they’re actually effective? To offer some insights, we’re joined by Suha Jethalal, the CEO of Bullfrog Power, a Canadian green energy retailer that offers electricity from renewable energy sources. And full disclosure, RBC is a Bullfrog Power customer. Suha, welcome to the 10 minute take.

Speaker 2 [00:01:28] Thank you so much, Theresa.

Speaker 1 [00:01:29] So according to your website last year, your customers have offset more than 67,000 tonnes of carbon. And this basically means that they participate in activities that generated 67,000 tonnes of carbon emissions and then paid for reducing that same amount elsewhere. And I personally paid for carbon offsets on my flights to through less taxes. So can you tell our audience how that works and what types of carbon emitting activities can be offset today?

Speaker 2 [00:01:57] So carbon offsets allow individuals and organizations to mitigate the emissions from one activity like necessary air travel that you mentioned with another activity elsewhere that avoids the reduces the same amount of emissions from being released into the atmosphere. So essentially the money goes to paying for a reduction in greenhouse gases that has already occurred through another project potentially globally. You know, say you’re flying from Toronto to Vancouver, you’re emitting greenhouse gases into the atmosphere by taking that flight. And you may address your emissions by purchasing carbon offsets from, let’s say, a project in Uganda that circulates water filters to avoid the burning of wood to boil water for safer drinking. And there are many other projects you could choose to reduce the impact of that flight.

Speaker 1 [00:02:51] Can you share more about some of these projects and which ones Bullfrog Power tends to invest in? Like, how do you decide which ones to look at?

Speaker 2 [00:03:00] So Bullfrog Power offers green energy solutions. So green electricity, green natural gas, green fuel. RBC has been a leader in this space, a customer of ours for many years, and one of our goal for our companies is less emissions that offers these carbon offsets. Now Last is ranked as the highest quality offset provider by the David Suzuki Foundation and the Pembina Institute. Our offsets are transparent. They’re verified by a third party and certified. They’re truly additional and making a difference in the environment. They’re permanent and they’re recent. In addition, they’re serialized and tracked on internationally recognized registries, so they’re completely transparent. The types of projects that we focus on are all meeting the highest standard of certification. So Gold Standard, or they’re A-plus CSA certified projects that we know are meeting the Kyoto protocols, clean development mechanism criteria for quantification, and they are meeting the highest criteria determined by the U.N. Now it’s really important to choose high quality offsets because, you know, there is some murkiness in the offset markets where you may not necessarily know if it’s truly permanent and truly adding value. There needs to be more standardization in the offset market. So you know that the measurement of the impact of that offset is truly in addition to what would have happened without it, that there wasn’t funding already in place to make that project happen, that it’s truly incremental.

Speaker 1 [00:04:41] Yes, I was I was just going to ask you about how we as consumers verify which projects are high quality and that we can trust to, you know, invest in. How would you advise people looking to offset their emissions and doing their due diligence for these sorts of projects?

Speaker 2 [00:05:00] I think it would be really important to see that they meet the U.N. CDM protocol and that they are gold standard certified or meeting other similar high standard certifications. You can also trust less emissions offset projects because they’re all serialized and tracked on registry. So you know that there’s not going to be any double counting of these things, right? They’re all globally tracked. In addition, it would be important to think about the types of projects you look at. So, for example, forestry, reforestation is essential and critical and an important activity. But let’s say you choose a project that in two years is destroyed by forest fires. Or let’s say you choose to invest in a project where it’s protecting a part of a forest, and that’s actually leading to deforestation. In another part of the forest. So there is leakage. You need to investigate the types of projects you’re looking at and make sure that they’re going to be permanent. They’re going to be lasting. They’re going to be additional and truly adding value. And I think going to a provider that you can trust verifies all of that for you is a start. So we, for example, have a voluntary independent audit that we conduct with an international accounting firm to ensure that all of our projects are, in fact, certified to the highest standards and meet all the criteria that we lay out. So, Suha, what’s the

Speaker 1 [00:06:37] Demand been for offsets? How has uptake changed over the last few years?

Speaker 2 [00:06:43] So I think the demand has risen because people have become so aware of the climate impacts, because they truly do want to make a difference. And there are some areas where there really isn’t a greener or more viable solution. So air travel is one of those areas. If you look at air travel, gas, of course, we wish there was, you know, aviation, biofuel available or commercial electric flights available that we could take. But since those options aren’t viable, offsets are a good solution in the interim until those are available to us. And so we have seen with increased awareness of the climate problem, we’ve seen an uptick in the demand for offsets. And I use the example of air travel, but that was obviously impacted by COVID. But whenever anyone was taking necessary flights, I think, you know, many people were turning to offsets to reduce their emissions. And we’re seeing travel come back into play now. And our demand has been going up in the offset space. And actually many projections are showing that carbon offset demand will increase tenfold in the next decade.

Speaker 1 [00:07:58] And out of curiosity, do you have any numbers on the proportion of air travelers who are starting to purchase more carbon offsets?

Speaker 2 [00:08:06] It’s still less than 1%.

Speaker 1 [00:08:08] Yeah, that’s wild.

Speaker 2 [00:08:09] Yeah, we need to do better. And I think, you know, yes, it’s grown, but it’s going to need to grow exponentially at some point.

Speaker 1 [00:08:16] I assume that the world will no longer have the capacity to offset more emissions, and instead we have to strictly focus on reducing carbon emissions. So how do you see something like carbon offsets evolving? And as we increasingly move towards a net zero world, what role will they play, if anything? Not just for corporations but perhaps for individuals?

Speaker 2 [00:08:37] So I think offsets are a good interim solution where greener solutions and technologies don’t exist. I think the best thing we can do is change our behaviors and offsetting offers us this solution now. And we don’t always have the greenest technologies available, but it is not. Our path out of this climate crisis or our path out of the climate crisis is truly evolving our behaviors and our products so that they are green offsets. You know, there’s a lot of criticism around them just delaying the problem at hand. They’re offering a solution for polluters to keep polluting. But I still think offsets are a good choice in doing something over nothing. But we need to act fast in developing the greener technologies and solutions that will get us out of this climate crisis.

Speaker 1 [00:09:31] That’s a really powerful note to end on her. Thank you so much for the nuance and for this conversation.

Speaker 2 [00:09:36] Thank you so much, Teresa.

Speaker 1 [00:09:39] As we heard, carbon offsets, carbon credits, they are an option of last resort after we’ve made every possible attempt to reduce our emissions by changing our behavior or switching to green powered alternatives, we’re not going to offset our way out of climate change. But it is a useful interim solution, as you said, and a way for consumers to be more mindful of our carbon footprint and for those GHG emitting moments and activities that are just not feasible to cut out of our lives yet. That’s it for this week’s ten minute take. Join us again next week for a special best of episode on Indigenous leadership in the clean energy transition. Until then, I’m Theresa Doe. Talk to you soon.

Speaker 3 [00:10:21] Disruptors, the ten minute take is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit rbc dot com, slash disruptors.

Jennifer Marron produces "Disruptors, an RBC podcast". Prior to joining RBC, Jennifer spent five years as Community Manager at MaRS Discovery District and cultivated a large network of industry leaders, entrepreneurs and partners to support the Canadian startup ecosystem. Her writing has appeared in The National Post, Financial Post, Techvibes, IT Business, CWTA Magazine and Procter & Gamble’s magazine, Rouge. Follow her on Twitter @J_Marron.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.