Rick Dimino

The recent heat waves in Massachusetts and the Pacific Northwest, combined with record global high temperatures and sea level rise, are disturbing reminders that climate change is here and its impacts are only going to worsen with time. Minimizing the severity of climate risks facing Boston and Massachusetts will require a comprehensive approach to reducing carbon emissions and decarbonization of all sectors of the economy.  

Carbon offsets will need to account for a percentage of these emissions reductions, to address unavoidable emissions until technological and grid modernization efforts advance. Developing an effective, transparent, and equitable carbon offsetting program will be a vital component of successfully decarbonizing our region’s economy.  

A Better City spent over a year researching and interviewing industry leaders, technical experts, and partner organizations in the Boston business community to understand and prioritize best practices that would work for offsetting carbon emissions. We recently produced a report that outlines the challenges, opportunities and recommendations necessary to create an effective, transparent, and equitable offsetting program in Massachusetts.  

Rules for Offsets Missing 

Carbon offsets are certificates or credits, where a single carbon credit represents a metric ton of carbon dioxide that is permanently reduced, avoided or removed from the atmosphere in one location, in order to compensate for new emissions that occur elsewhere. There is an established system of independent third-party carbon registries that verify the delivery of these credits.  

Unfortunately, there is no universal price for carbon and there are no widely adopted best practices for carbon offsetting. This lack of clarity and consistency creates fragmented markets, price volatility and inconsistent delivery of carbon emissions avoided or removed through offset projects. 

The city of Boston has committed to achieving net zero emissions by 2050, allowing up to 10 percent of city-wide emissions to be compensated for by strategies like carbon offsets. Similarly, the commonwealth of Massachusetts recently set a statutory mandate to reach net zero by 2050, allowing for potentially up to 15 percent of state-wide emissions to be compensated for by offsets come 2050.  

However, it is still unclear what types of carbon offset projects might count for emission reduction compliance. We all need more information on how a possible offsetting system will work and be regulated, and we need to begin a robust stakeholder engagement process now to determine offsetting best practice guidance.  

A Critical Tool for CRE 

What we do know is that offsets are likely to be a part of our city- and state-level climate solutions in the coming decade. They are a necessary tool to help hard-to-decarbonize buildings like hospitals, data centers and labs, which are energy-intensive and operate every hour of the day, meet emissions reduction policies while technology advances.  

Initial recommendations in the report call for the commonwealth and city of Boston to collaborate on best-practice guidance to assist interested offset buyers. The commonwealth should also consider creating its own customized verification scheme, rather than outsourcing offsetting project verification to international carbon registries. This could be possible by partnering with local conservation organizations, utilities, consulting firms, and environmental nonprofits as verifiers, to empower local experts that are most familiar with Massachusetts’ landscape and policy context.  

We will also need to prioritize equitable clean energy workforce development, expand the Carbon Sequestration Task Force advising Gov. Charlie Baker to include non-government perspectives, and establish industry-specific offset guidelines, to avoid creating a rigid system that is not effective for some sectors, like buildings or transportation.  

Where to, Next? 

Beyond the next five years, governance issues in Massachusetts are likely to require additional refinement to further incentivize decarbonization efforts. We can also anticipate a robust auction process for carbon offset allowances that will generate additional funding, and there is potential for large-scale investment into our natural climate solutions and natural heritage, funded by offsetting programs.  

Carbon offsets can serve as a transitional tool to enable decarbonization in Massachusetts and promote near-term carbon removals, as energy efficiency initiatives and clean energy technologies scale up. Additionally, carbon offsetting holds promise in generating new revenue for climate solutions in Massachusetts, as the global carbon market has grown to about $272 billion in 2020 and is expected to grow further.  

It is only a matter of time before offsets come to Massachusetts and Boston as a tool in emissions reduction compliance. If we can begin robust best practices dialogues now, by engaging the business community, community-based organizations, environmental justice communities and other stakeholders, then we will be more effective in delivering on our environmental, economic, and equity goals once offsets are permitted for emissions reduction compliance.  

This work will not be simple, but it is one solution where the public and private sectors in Massachusetts are eager to find common ground, reach our shared goals and help to meet the challenges of global climate change together.  

Rick Dimino is CEO of A Better City. 

The Potential of Carbon Offsets Starts with Proper Guidance

by Rick Dimino time to read: 3 min