Carbon offsetting is a process that involves purchasing and cancelling carbon emissions credits equivalent to the carbon footprint of an activity, company, product, or service. By cancelling these credits, they are permanently removed from circulation, ensuring that no one else can claim the emissions reduction they represent. Carbon offsetting can be applied to various aspects, ranging from personal car usage to an entire company’s carbon footprint. It allows for the offsetting of both direct emissions, such as travel, and indirect emissions, such as those produced during the manufacturing of raw materials.
Who Engages in Carbon Offsetting?
People and companies choose to offset their carbon emissions for different reasons. Some do it because they are obligated to, either due to customer demands or to comply with mandatory emissions trading schemes, driven by the incentive to save money. In such cases, the primary focus is often on finding the most cost-effective offset solution that meets the required standards. Others engage in carbon offsetting because they believe it is the right thing to do for the environment. These individuals or companies grapple with the trade-off between the positive environmental and social attributes of a carbon offset and the added cost associated with these features. Generally, offsets with more positive attributes tend to be more expensive.
As long as an offset is real, measurable, verifiable, and additional, it is considered legitimate for carbon footprint offsetting. There is no right or wrong offset type to use; it depends on individual outlook and priorities. However, if the price paid for each carbon offset is higher than a few euros, it is advisable to confirm with the offset provider that a significant portion of the payment goes to the project developer, incentivizing them to create more carbon-reducing projects.
Carbon offsetting is open to anyone, from individuals to large global corporations.
Why Engage in Carbon Offsetting?
As people develop a better understanding of the environmental impact of their carbon footprint, driven in part by initiatives like the Paris Accords of 2015, which aim to limit global temperature rise, they are increasingly demanding greater environmental accountability from themselves and the products they invest in or consume. Carbon offsetting, alongside implementing practical carbon emission reduction measures, allows businesses and individuals to acknowledge and address their impact on the climate. Almost every action we take, whether it’s flying for a family vacation or organizing a corporate event, has an environmental impact. Offsetting provides a means to reduce the climate impact of emissions that are challenging or impossible to avoid by paying others to make emissions reductions on their behalf. The market for offset credits offers a way to neutralize one’s carbon footprint.
How Does Carbon Offsetting Work?
There is a wide variety of offset projects worldwide, spanning almost every country. These projects utilize various technologies, including renewable energy, energy efficiency, afforestation, reforestation, and industrial gas destruction. Each carbon credit generated by these projects represents one metric ton of CO2 or CO2 equivalent emissions that would have been emitted if the project did not exist.
Offset-generating projects undergo thorough auditing, and the groups responsible for issuing carbon credits adhere to robust quality criteria. The Clean Development Mechanism (CDM), overseen by the United Nations Framework Convention on Climate Change (UNFCCC), is a well-known certification scheme. All offset projects must demonstrate additionality, meaning that their emissions reductions are dependent on the revenue generated by carbon credit sales. This ensures that only projects where carbon credit generation is an essential part of their economics, rather than a by-product, qualify to receive carbon credits.
The array of project types, jurisdictions, and carbon crediting regimes available for carbon offsetting can be overwhelming. The first step is to determine whether the priority is the cheapest carbon credit or one from a project that has additional positive attributes. For example, opting for a renewable energy project or a clean cookstove project in a Least Developed country can contribute to sustainable development goals on multiple levels. A reputable carbon offsetting company will offer a range of projects, locations, and even choices between offset crediting mechanisms.
