IVL Swedish Environmental Research Institute

The net-zero greenhouse gas (GHG) emissions concept is emerging as a fundamental principle for initiatives to address climate change ranging from global to corporate scale. Offsetting emissions using carbon credits features in many sub-global net-zero and carbon-neutrality claims and pledges. Assertions that the use of emission reduction credits (ERCs) is insufficient in the context of offsetting emissions for such claims at sub-global scales are gaining acceptance.

Conversely, we show that regardless of whether offsetting is based on the use of ERCs or carbon removal credits (CRCs), the impact on the net transfer of GHG to the atmosphere is the same. Therefore, both ERCs and CRCs are adequate for offsetting with the purpose of achieving net-zero emissions or carbon neutrality. We show that assertions that the use of ERCs is insufficient for offsetting for these purposes are based on an incorrect setting of assessment boundaries and related misconceptions. The results presented in this paper have fundamental implications for what kind of GHG mitigation action beyond entities’ own value chains may be considered adequate in relation to entities’ claims concerning making no contribution to the net accumulation of GHG in the atmosphere, i.e. net-zero and carbon-neutrality claims.