It sounds too good to be true. Just pay to plant a few trees and you can travel as far and as frequently as you like. Offsetting schemes, particularly ones offered by budget airlines, have been roundly condemned and criticised. In more than a few cases those criticisms have proved justified. I admit, I was very sceptical when I first met Christian Møller-Holst whose business is based on making business trips not just carbon neutral, but net zero.
This is what Christian told me:
Anthony: My guest today is Christian Møller Holst, Who is founder of Goodwings
Welcome to the Sustainable Futures Report.
Christian: Thank you Anthony, thanks for having me.
Anthony: Now as I understand it Goodwings is a travel agency that provides complementary carbon offsets. In other words, somebody who books a trip with you within the price, you will have covered the carbon footprint of his flight, his transits, even a hotel Stay. Am I correct there?
Christian: Mmmm...Partly. But close enough.
We are a hotel booking website like you know, from booking.com or hotels.com.
With Goodwings, you get access to the same or roughly a million hotels and we have the same or comparable rate levels as any other platform.
We're quite different in our business model, because before you can complete your booking, you need to type in and use our carbon calculator that accurately calculates how much CO2 you're emitting with your total travel.
So of course, the hotel that you are booking with us. But also the flight, the train, the bus, The car that takes you there and your transfers too. So your total travel footprint is calculated on the website and we then use our booking revenues to pay for your removal.
Anthony: Right. But other people would say, a lot of people are very skeptical about carbon offsets, and they would say, a lot of people are nervous about flying and making long distance trips and all you're doing is making them feel better. But you're not actually achieving anything that serves the benefit of the planet.
Christian: I think we are definitely doing something that is benefiting the planet and verifiably fighting climate change. But I mean, obviously I know where you're getting at. Obviously we haven't invented a zero emission aviation technology. We have not.
We have not enabled you to get from Copenhagen to New York without emitting CO2. So we have two options, really; Stop traveling or continue to travel, but more climate conscious and if we look at the first one: COVID, what have we learned through COVID? We have seen a world that has been increasingly suffering from isolationism. We have seen, I believe 320 million people work in travel and tourism, which means that a billion people's lives depend on someone in the family bringing home money from this industry. That industry has been shut down for nearly two years.
So on the people side, people are suffering. On the planet side. You're right. It would be better not to travel until we can travel zero emission.
Anthony: I got a number of things out of that.
Yes. We haven't traveled so much during lockdown, but we've also found that we can be very productive remotely as we are today. We can have meetings with people all over the world.
Christian: totally, totally.
And we encourage it. I mean, one of the objectives with the automatic carbon calculation when you book your hotels with Goodwings is that we enable travelers and businesses to get an idea and overview of how much are we actually emitting with the different transportation types. So I can go from Copenhagen to Berlin. I can fly. You know, emit 300 kg CO2 or I can take the train and emit 80 kilos.
So, number one is to reduce your emissions and we can do that by cancelling the travel that is not necessary enough and if we have other options or lower emission options go for those.
And also I think one of the beauties of COVID really has been that we have rediscovered some of the destination gems in our backyard.
You know, I hear people saying “We went to Norway” you know, Danes traveling or Swedes traveling to Norway and basically getting the same travel experiences as if they've traveled to Canada.
Parts of Southern or Eastern Europe, Croatia for instance, resembles the Maldives.
So we don't need to travel the world as we did pre pandemic, we can travel shorter, we can travel slower and we can emit much less and still have great experiences.
And businesses are really cutting down on unnecessary travel, which we very much are in favour of.
Anthony: All right.
Let's look at the mechanics of offsetting. Now there are schemes, for example, where somebody will go into a remote part of Africa, and they'll find a community which has got no electricity and they say “they're thinking about putting in a diesel generator - no! We'll put in a wind turbine, and therefore we have stopped the emissions that would have come from that diesel generator as we got a wind turbine”.
Well that's fine. But that hasn't actually reduced any of the CO2 currently in the atmosphere. It stopped it increasing in the future. But it surely is not a true offset.
Christian: There are two different types of offsets and I totally understand if people are confused and don't know how it works because few people really know how it works. They just feel good when some website says “Don't worry, we compensated your freight” or whatever. But we should know this. It is quite important, especially to counter greenwashing.
I think what we need, Anthony, is a vocabulary for this. And we should really have a vocabulary. In Denmark you can send in suggestions for the Danish Parliament for regulation or law. And in January this year I submitted a citizen's proposal for the adaptation of marketing vocabulary for green services, because we have a huge dairy producer in Denmark, which is fundamentally a good company, but they're screwing around with the milk bottle labeled CO2 Neutral.
But if you look at their website, they're not neutralising or removing emissions because it would be too costly. So they're buying some cheap compensation credits, and I know what they're being sold for, is that it's around a dollar per ton.
Christian: And that's OK, if they had put “CO2 compensated” and actually explained to the milk drinkers what that means. But it’s not good enough to say carbon neutral or Net-zero if you're not removing your emissions verifiably. It shouldn't be.
Christian: If you look at all the carbon credits up there on the global credit market, 80-90% are compensation credits or avoidances, so basically it's a donation to a green project that is helping someone emit less in the future.
At only 10-15% are credits associated with projects that are removing carbon from the atmosphere. And again You can do that through either technology or nature based.
On the technology side you've probably seen these CO2 vacuum machines, direct air capture, Clime works, Carb Fix. All these new frontier solutions that many believe - and I hope so - will be part of a future tool set, if we can find a way of doing it cost-efficient and from green electricity and find a way of permanently storing it blah blah blah and a lot of other issues along the way.
But yeah, hopefully something that we’ll solve, or you can remove carbon from the atmosphere nature based.
The most widely used type of nature based project is tree-planting, but you also have regenerative agriculture or mineralization or other ways of doing it.
But you're right. If you look at the cost of offsets, why are most companies not very clear in their communication? Because they're going for the cheaper credits, the credits that are not removing carbon but simply compensating, donating money to a windmill somewhere, which also is good but in my view gives you the wrong impression.
Because it gives me the impression as the consumer, that “Oh. I'm emitting CO2 when I buy this t-shirt or when I’m going on this trip, but it's okay because it's been compensated.
No. It's not okay. What we need to do especially in industries that are hard to abate where reducing emissions in the short term, in the near future, is simply not possible because we don't have the technologies.
Aviation being one of them, what we need to do is invest in the expensive verified removals. Those cost between twenty and thirty dollars per ton.
This is Anthony, This is exactly why we started Goodwings. I saw an industry, six years ago, that spent, at the time and still does, 40-45 billion dollars on advertising.
40-45 billion dollars every year is being spent on ads that create no value for people or planet.
So the philosophy of Goodwings is, what if we can grow a brand, reach millions of people and businesses around the world, but without spending very much money on advertising?
Then we can allocate all our booking revenues to these more expensive verified, offset types, removing carbon from the atmosphere.
So, if you book your hotel with Goodwings, you're not paying more for the hotel room. You don't limit yourself of choice. You have roughly the same million hotels as you would find elsewhere.
The big difference is we as a company, as a B Corp, have decided that the revenues that we get from your hotel booking. We allocate that to pay for the for your removal off your total trip.
So if you're going from Copenhagen to New York on economy class and emitting 2 t (CO2), that's gonna cost us 40-50 dollars to turn your trip net zero. But we can afford it because we don't need to make money from the bookings.
Our main source of income are very low subscription payments from our members. Our members are conscious travelers like you or businesses who wants to travel net zero easy and affordable. So companies are paying us 50-300 Dollars a month for the entire company. It's nothing. And that's our main source of income.
So all the booking revenues it's like a close loop is kind of like allocated to finance the the calculation and the removal of your emissions we have we have businesses that we're removing CO2 for, at the amount of 2000-3000 tons a year.
Anthony: I'd like to talk to you in a moment about your your partners and the people that you're working with, but just just staying with offsets for the moment.
We've agreed that probably the most effective given that technology is still developing, is forestry, is trees.
So when we go to you and we set up a transaction and you have to do the offsets for us. Are you paying somebody at that point to plant a tree? Or are you buying part of a tree which has been specifically grown in order to provide an offset? And has now actually embodied some carbon.
Christian: The latter.
Christian: I mean, you can say we focus less on planting trees and more on removing carbon.
There's a reason that we haven't just embarked on a partnership with, you know any of the thousands of tree planting projects out there because most of them are unverified.
We've all seen the horrible examples of these types of projects. Many of them are good. No doubt about that. But there's no verification or certainty that the trees will be put in the ground. And when will it happen? Will they be taken care of?
Did you see the example from Turkey where they planted I believe a million trees and the guardian found out that months later, ninety percent of the saplings were dead.
We cannot live with this from a planetary point of view, but also from a business point of view. There’s a lot of risk. Goodwings, we don't want to be associated with this.
And we have a business model that can enable us to do things right. So that’s what we do. So we only invest in verified projects. So in that sense, we focus more on how many VCU'S, Verified Credit Units have been issued, and can be purchased to remove and we focus less on how many trees is that.
Because when you focus too much on the trees, you kind of lose focus on what's important. That is the verifiable documentation that carbon has been absorbed, not will be some time into the future, in 25 years, if the trees thrive and survive.
Anthony: Tell me a bit more about verification. How does that work?
So basically I mean there are I believe 3 or 4 major registries in the world for these types of forestry projects. Gold standard by WWF, VCS, American carbon registry and the fourth I can't remember the name of right now.
But these are very strong methodologies and independent validation, take into account additionality, like you were talking about earlier with the windmill, permanence and so on.
So in our case, we've chosen VCS verified projects. And what it means really is that someone has a piece of land wants to plant forest. And the global carbon market represents an extra source of income because that person can apply to get the forest verified by Verra, and one of these verifications is VCS.
And if you follow their guidelines,it’s kind of like an ISO management system, really, if you follow the guidelines and you have an independent validator coming out every 2-3 years, Rainforest Alliance or some other environmental organization.
That organization will then document. “Okay, your trees are actually here, more trees have been planted since we were here 2 years ago. The tree mass has absorbed 200 or 500 tons of CO2” and that corresponds to an amount of credits that the forest owner can then sell on the market, you can say, and get an income per ton removed.
So it's always a ton that has been removed. Not will be. You limit the risk of double accounting, because all the VCU’s, the Carbon Units have individual serial numbers kind of like blockchain.
You also take into account the risk of forest fires, for instance or illegal harvesting because you have this buffer pool. I believe under VCS it's around thirty percent.
So, if the forest has absorbed a million tons (CO2), you ought to be able to sell a million credits. But you can only sell 700.000.
So all these factors, we have decided we need that. We need this level of integrity. But it's costly. I mean, you can plant a tree on whatever you know, plant-a-tree.org kind of website for as low as 10 euro cent, but you have no certainty that you will be impacting climate change.
Whereas with these projects, you might be paying a hundred times more. 25-30 dollars per ton. But you know that it is occurring - It has occurred.
Anthony: Well. That's fascinating. That's a completely new slant on the offsetting I think for many, many people. Thank you for explaining exactly how it works.
You’ve got a very interesting business model. You’re unique in what you're doing.
Christian: Oh yes. We are quite unique, and I think one of the reasons that we ended up here is that we didn't come from travel.
Because everyone in travel is just chasing bookings, and it creates an unhealthy economy and an industry where you're just chasing bookings, because you want to increase your KPI’s.
We don't care about booking. We don't need, we don't encourage our clients to book more travels because we don't make money from the bookings.
So it creates a more healthy relationship between us and our clients. We make the money from the subscription payments, which is as I said earlier, quite low, because it's important for us to democratize access to truly sustainable travel.
Because up until now sustainable travel, at least the examples that I've seen, has been this eco resort in the Maldives, which couldn't be further from sustainable travel, really.
Anthony: Right. And so the people who pay subscriptions, your subscribers are, the corporates or are they individuals?
They are primarily businesses, because that's where we can get some volume fast. We do have a leisure Net-zero travel membership, for I believe 39 dollars for a full year, which again is just a fraction of what many people spend on travel.
But on the business side we are quite successful at the time. We relaunched in January, and even despite that 2021 unfortunately has been so much affected by COVID, we've had hundreds of businesses signing up from all over the world.
And we, just a note on the business model, because all the money from the bookings allocated to fight climate change and verified removal, so the revenues are from the subscription payments which are not, you know, astronomic figures.
So we need to find ways of lowering our operating costs. And one of the big operating costs, obviously, is the ad spend.
So how can we become the Go-to platform for conscious business leaders and travelers without spending money on advertising?
Well, I'm very thankful that you have invited me today because this is part of our growth strategy, to share with the world what we have built. But we also work with businesses.
For instance, we recently partnered with Intuit, a US software company. They have 15 million businesses around the world - an impressive number. And they have just during COP26 launched their climate strategy, which is not so much about what theycan do because they are an office company, they don't emit much. Of course they do emit something. They have action plans for reducing that obviously. But what if they could turn their 15 million business clients into climate champions?
So it's a truly admirable philosophy, and they have put together a climate action marketplace, and we have been vetted and selected to be the travel component. So that's the sort of partnership, where we actually spend zero on advertising, but still reach up to 15 million businesses.
Anthony: Well Christian. Thank you very much for sharing this with us, it’s been very interesting.
And thank you for taking the time to talk to the sustainable futures report.
Christian: Thanks for having me. Thank you so much.
The key thing then to remember is the difference between carbon compensation and carbon removal. Carbon compensation - avoiding future carbon emissions - may be a good thing to do and helps developing nations, but it does not reduce the amount of CO2 in the atmosphere. It is not a silver bullet. Carbon removal, on the other hand, is far more expensive but is a step towards net zero.
Carbon neutral and net zero are terms we hear every day, frequently used interchangeably. They are not the same thing. I’ll be exploring the difference on Friday.
For the moment, thanks again to Christian Møller-Holst, thanks to you for listening.
That was the Wednesday interview from the Sustainable Futures Report.
I’m Anthony Day.
Until next time.
Visit Goodwings at https://www.goodwings.com