Carbon offsets are a way of compensating for emissions from activities that contribute to climate change, such as transportation, manufacturing, and power generation. Offsets can be purchased from businesses, governments, or non-profit organizations. One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gasses.
The most common way to offset carbon emissions is through the planting of trees, which sequester carbon dioxide from the atmosphere. Large groups in the public and private sector can purchase offsets to meet emissions targets or voluntary goals. Individuals can also purchase offsets to compensate for high-carbon lifestyle choices—for example from flying.
When offsets are purchased, the money is used to fund projects that reduce greenhouse gas emissions. These include renewable energy projects, energy efficiency upgrades, and forest conservation initiatives. The benefits of these projects are twofold: they help fight climate change by reducing emissions, and they also provide social and economic benefits to the communities where they are located.
Carbon offsets are particularly useful in compensating for emissions from activities that are currently still difficult to avoid or to fund projects that would not otherwise be economically viable.
But there are caveats, too.
While compliance offsets (the kind used to meet government-mandated emissions reductions) are verified by a third party, the voluntary offsets market does not require independent verification. Due diligence is required to avoid greenwashing or outright fraud.
And as pointed out in The Carbon Almanac, critics argue that ‘offseting allows users of fossil fuels to continue to avoid confronting the climate emergency of carbon combustion.’
While the value of carbon offsetting as an intermediary tool should not be underestimated, it doesn’t replace the need for systemic change in reducing carbon emissions.