Rational calculation is formalised in cost benefit analysis, a widely used tool for business decisions, infrastructure projects, policy interventions and so on. At its best, cost benefit analysis enables the benefits and disbenefits of a proposed course of action to be made explicit and to be considered. But it also raises issues about whether or not things can be converted to a common basis, and who decides how this can be done. For example, how might the economic gains from a new airport be compared with the decreased amenity for the local human population and the environmental impacts of increased aviation?
Converting different things to a common basis is also core to the concept of “offsetting”. Carbon offsets are perhaps the best-known environmental offsets. For example, airlines offer passengers a service whereby they can pay to have the emissions consumed during their flight “offset” by projects such as tree planting. Many of these efforts are highly suspect. By turning carbon into a commodity, they gloss over the complexities of the different sources and sinks of greenhouse gases, in this case a fossilized source and a living source, and the different industrial and biological processes which are involved. The time periods are also different – with the trees calculated to take many years to soak up the carbon emitted in a single flight.
There are other types of environmental offsets. Biodiversity offsetting is an increasingly popular policy tool used by Australian governments, whereby biodiversity loss in one place is “exchanged” for biodiversity gains in another. For example, clearing woodland for a development in one place can be offset by protecting similar woodland in another. A major problem in this instance – apart from differences in the biodiversity values of different sites – is the baseline assumption that the protected biodiversity at the offset site would otherwise also have been lost. In other words, there is still an overarching assumption of biodiversity decline.
Some may argue that offsetting is an important contribution when there is no choice but to proceed with an action that causes damage. That may or may not be the case. To what extent is there really “no choice”? Does offsetting serve to assuage guilt and effectively let the individual, institution or country off the hook from choosing another course of action? Among giving rise to various social and environmental concerns, international carbon credits enable polluters in wealthy countries to continue to pollute while outsourcing the responsibility for reducing greenhouse gas emissions to poor countries. The website Cheat Neutral parodies the shifting of responsibility involved in carbon offsetting, by using the example of paying somebody else to be faithful to offset your own infidelities.
The concepts and practices of offsetting raise a host of issues – such as who bears responsibility for negative consequences of actions and decisions, whether different values and processes can be equivalised, what the baseline scenario in the absence of offsetting is judged to be, and what might be the unintended consequences of offsetting. These are questions that we would be wise to raise in the face of the seductiveness of the seeming simplicity of offsetting.