The global average concentration of carbon dioxide (CO₂) in the atmosphere registers at over 400 parts per million. Carbon offsets could play a crucial role in lowering this level because they can either remove CO₂ from the atmosphere or prevent future emissions. So, we had to ask: What are carbon offsets really, and could they help us mitigate climate change?

Carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. They include various technology-based (e.g., direct air capture) and nature-based solutions (e.g., reforestation) with varying levels of permanence, cost, and scalability, depending on the specific project.

Keep reading to find out all about what carbon offsets are, how they work, how effective and efficient they are, what their pros and cons are, and what the best ones are. 

At the end of the article, we’ll also share with you how carbon offsets can help mitigate climate change and what better alternatives to them are. 

The Big Picture of Carbon Offsets

We already have governmental-level policies in place to reduce greenhouse gas emissions (GHGs), but how do we reduce emissions from activities where sustainable alternatives are not yet widely available? The answer just might be carbon offsets.

What Are Carbon Offsets

When you hear the words “carbon offset”, think about the term “compensation”. Essentially, carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. Because GHGs are found everywhere in our atmosphere, cutting GHGs at any location on Earth provides emission reduction benefits.

“Carbon Offset: a way for a company or person to reduce the level of carbon dioxide for which they are responsible by paying money to a company that works to reduce the total amount produced in the world, for example by planting trees” 

Oxford Dictionary

Carbon offsets are measured in tons of carbon dioxide equivalents and are bought and sold through international brokers, online retailers, and trading platforms. 

How Do Carbon Offsets Work

Carbon offsets also play a crucial role in reducing our carbon footprint, the amount of CO₂ emissions associated with an individual or an entity. The carbon footprint is one of the ways we measure the effects of human-induced global climate change. It primarily focuses on the greenhouse gas emissions associated with consumption, but also includes other emissions such as methane, nitrous oxide, and chlorofluorocarbons.

Carbon offsets can be split into 2 categories, technology-based and nature-based carbon offsets. 

• Technology-based carbon offsets are those that use specialized technology to extract carbon from the atmosphere so that it can then be repurposed or stored permanently in various reservoirs. These include direct carbon/air capture, carbon mineralization, energy efficiency, waste management, and some agricultural offsets.

• Nature-based carbon offsets are those that focus on the long-term storage of captured or removed carbon in plants, soils, and the ocean, which are capable of absorbing massive amounts of our greenhouse gas (GHG) emissions. These include reforestation, afforestation, REDD+, blue carbon, and some agricultural offsets. 

How Effective and Efficient Are Carbon Offsets

In terms of effectiveness, carbon offsets can reduce CH₄ emissions, reinforce our terrestrial and marine carbon sinks, and promote energy independence. However, they can also have varying levels of permanence, lack additionality, and may not reduce carbon emissions immediately, depending on the type of offset. Lastly, they do not reduce your own carbon emissions, which could lead to greenwashing.

In terms of efficiency, carbon offsets can preserve existing forests and marine ecosystems, continue to avoid CO₂ emissions after project lifespans, and have low rates of carbon re-emission. However, they can also have varying levels of costs, may face carbon storage capacity limitations, and can be difficult to monitor and verify, depending on the type of offset. In general, carbon offsets are not yet scaled to compensate for our global emissions.

Carbon offsets are effective at mitigating climate change because:

• Offsets involving waste management and agriculture can reduce methane (CH₄) emissions.
• Offsets involving reforestation, afforestation, REDD+, and agriculture reinforce forests, which are one of our largest carbon sinks. 
• Offsets involving blue carbon reinforce coastal and marine ecosystems, which are one of our largest carbon sinks. 
• Offsets involving energy efficiency can help reduce reliance on fossil fuels, leading to increased energy security and energy independence.

However, carbon offsets can also lack effectiveness because: 

• The permanence of carbon offsets depends on whether it is a technology-based or nature-based solution.
• Offsets involving energy efficiency and waste management often lack additionality because many projects receiving revenue now would have been built regardless.
• Carbon offsets may not reduce carbon emissions immediately, depending on the type of offset.

Carbon offsets are efficient at reducing CO₂ emissions because they:

• Offsets involving REDD+ and blue carbon can efficiently protect existing forests and marine ecosystems.
• Offsets involving reforestation, afforestation, and blue carbon offsets can continue to reduce carbon long after projects have been completed.
• Offsets involving direct carbon/air capture (DCC/DAC) and carbon mineralization are permanent solutions with low rates of CO₂ re-emission.

However, carbon offsets can also lack efficiency because: 

• Carbon offsets have varying levels of costs, depending if it is a technology or nature-based offset.
• Reforestation, afforestation, and some blue carbon and agricultural offsets are all limited by trees’ carbon storage capacity. 
• Energy efficiency, blue carbon, and agricultural carbon offsets can be difficult to standardize, verify, and monitor.
• Carbon offsets are not yet at a scale where they can compensate for our global carbon emissions.

In addition, carbon offsets do not reduce your own carbon emissions, which can lead to greenwashing. This occurs when emissions are only offset and not reduced from the source, and the consumer is deceived into thinking they are offsetting their emissions but in reality, they are not. This is why we should first reduce our emissions before relying on offsets.

What Are The 8 Pros and 8 Cons of Carbon Offsets

Depending on the type, carbon offsets can permanently and quickly reduce CO₂ and CH₄ emissions. They also can be cost-effective, promote energy independence, reinforce our terrestrial and marine carbon sinks, and help offset carbon emissions that can’t be reduced otherwise.

Depending on the type, carbon offsets can lack permanence or additionality, be expensive or difficult to monitor and verify, and are not yet scaled to compensate for our global emissions. They also can face carbon storage capacity limitations, do not reduce emissions immediately, and do not reduce your own carbon emissions, which can lead to greenwashing.

What Are the 8 Pros of Carbon Offsets

Carbon offsets have various pros that make them effective at reducing carbon emissions.

What Are the 8 Cons of Carbon Offsets

Understanding the drawbacks of carbon offsets is important in order to effectively mitigate climate change

How Could You Offset Your Own Carbon Footprint With Carbon Offsets

The market for carbon offsets was small in the year 2000, but by 2010 it had already grown to represent nearly $10 billion worldwide. The voluntary carbon offset market (VCM) is where everyday consumers can purchase carbon offsets to offset their carbon emissions. 

The total carbon offset market is now valued at over $262 billion and represents more than 20% of global GHG emissions. The Ecosystem Marketplace predicts the VCM can grow to $50B by the year 2050. 

How Can Carbon Offsets Help Mitigate Climate Change

Climate change is a severe and long-term consequence of fossil fuel combustion. Carbon offsets that are additional and permanent can help mitigate climate change because they reduce emissions from activities where sustainable alternatives are not yet widely available. If left untreated, atmospheric carbon can remain there for tens of thousands of years and exacerbate the negative effects of climate change.

How is Climate Change Defined

Climate change is arguably the most severe, long-term global impact of fossil fuel combustion. Every year, approximately 33 billion tons (bt) of CO₂ are emitted from burning fossil fuels. The carbon found in fossil fuels reacts with oxygen in the air to produce CO₂. 

“Climate change: changes in the earth’s weather, including changes in temperature, wind patterns and rainfall, especially the increase in the temperature of the earth’s atmosphere that is caused by the increase of particular gasses, especially carbon dioxide.”

Oxford Dictionary

Atmospheric CO₂ fuels climate change, which results in global warming. When CO₂ and other air pollutants absorb sunlight and solar radiation in the atmosphere, they trap the heat and act as an insulator for the planet. Since the Industrial Revolution, Earth’s temperature has risen a little more than 1 degree Celsius (C), or 2 degrees Fahrenheit (F). Between 1880-1980 the global temperature rose by 0.07C every 10 years. This rate has more than doubled since 1981, with a current global annual temperature rise of 0.18C, or 0.32F, for every 10 years. 

As outlined in the 2015 Paris Climate Agreement, we must cut current GHG emissions by 50% by 2030 and reach net zero by 2050. 

How Do Carbon Offsets Generally Help Mitigate Climate Change

Levels of carbon in our atmosphere that cause climate change have increased as a result of human emissions since the beginning of the Industrial Revolution in 1750. The global average concentration of carbon dioxide in the atmosphere today registers at over 400 parts per million. Carbon offsets can help prevent these levels from increasing even more.

When you hear the words “carbon offset”, think about the term “compensation”. Essentially, carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. 

Carbon offsets that meet key criteria and verified project standards, are additional and permanent, and are part of projects that are carried out until the end of their lifespan have the best chance of reducing carbon emissions and therefore reducing climate change. 

When we offset CO₂ we also slow the rate of global temperature rise, which in turn minimizes the effects of climate change. 

How Do Carbon Offsets Specifically Help Mitigate Climate Change

Direct carbon/air capture and carbon mineralization offsets specifically help mitigate climate change because these methods permanently lock away CO₂ for thousands of years with little to no carbon re-emission.

Reforestation, afforestation, and REDD+ offsets specifically help mitigate climate change because they plant more trees, and trees remove CO₂ from the air as they grow. By increasing the number of trees on our planet, we increase the amount of carbon they are capable of storing. The more carbon our forests can sequester, the less carbon there is in our atmosphere. 

Blue carbon offsets specifically help mitigate climate change because they protect coastal and marine ecosystems, which are capable of absorbing more CO₂ per acre than rainforests and at a rate 10x greater. 

Energy-efficiency offsets involving clean cookstoves, water filtration programs, and co-generation facilities specifically help mitigate climate change by reducing CO₂ emissions from direct fossil fuel combustion and indirect electricity generation. By using energy-efficient appliances and methodologies, we reduce the amount of CO₂ entering our atmosphere. 

Waste management offsets involving landfill gas capture/combustion, landfill gas to renewable energy, biodigesters, biogas, and composting specifically help mitigate climate change because they capture emissions from waste, turn it into renewable energy, and reduce the overall amount of waste. 

Agricultural offsets including biochar, agroforestry, avoided grassland conversion, and CH₄ capture can specifically help mitigate climate change because they reduce CO₂ and CH₄ emissions in one of the biggest industries worldwide.

What Are Better Alternatives to Carbon Offsets

If used correctly, carbon offsets can provide environmental, economic, and social benefits beyond reducing carbon emissions. They have the potential to instigate meaningful environmental change and begin to reverse some of the effects of climate change. 

However, we can’t let this method be a guilt-free way to reduce carbon emissions. Carbon offsets must be used in conjunction with direct carbon reduction measures to reduce carbon emissions for the long term. 

These reduction measures don’t have to involve drastic changes either. Actions that may seem small can have a big impact because those small changes add up! You can reduce your carbon footprint in three main areas of your life: household, travel, and lifestyle. 

Reduce your household carbon footprint:

• Wash with cold water: Washing clothes in cold water could reduce carbon emissions by up to 11 million tons. Approximately 90% of the energy is used to heat the water, so switching to cold saves also saves energy.

• Replace incandescent bulbs with fluorescent bulbs: Fluorescent bulbs use 75% less energy than incandescent ones, saving energy and thus reducing electricity demand and GHG emissions.

Reduce your travel carbon footprint:

• Fly less: Aviation accounts for around 1.9% of global carbon emissions and 2.5% of CO2. Air crafts run on jet gasoline, which is converted to CO₂ when burned.

• Walk or bike when possible: The most efficient ways of traveling are walking, bicycling, or taking the train. Using a bike instead of a car can reduce carbon emissions by 75%. These forms of transportation also provide lower levels of air pollution.

Reduce your lifestyle carbon footprint:

• Switch to renewable energy sources: The six most common types of renewable energy are solar, wind, hydro, tidal, geothermal, and biomass energy. They are a substitute for fossil fuels that can reduce the effects of global warming by limiting global carbon emissions and other pollutants.

• Recycle: Recycling uses less energy and deposits less waste in landfills. Less manufacturing and transportation energy costs means fewer carbon emissions generated. Less waste in landfills means less CH₄ is generated.

• Switch from single-use to sustainable products: Reusing products avoids resource extraction, reduces energy use, reduces waste generation, and can prevent littering.

• Eat less meat and dairy: Meat and dairy account for 14.5% of global GHG emissions, with beef and lamb being the most carbon-intensive. Globally, we consume much more meat than is considered sustainable, and switching to a vegan or vegetarian diet could reduce emissions. 

• Take shorter showers: Approximately 1.2 trillion gallons of water are used each year in the United States just for showering purposes, and showering takes up about 17% of residential water usage. The amount of water consumed and the energy cost of that consumption are directly related. The less water we use the less energy we use. And the less energy we use, the less of a negative impact we have on the environment.

Because carbon offsets are an indirect way and not a direct way of reducing emissions, they alone will not be enough to reduce global carbon emissions significantly. Direct measures of emission reductions, such as reducing individual energy use and consumption, are better alternatives to carbon offsets. 

Final Thoughts

The effectiveness and efficiency of carbon offsets highly depend on the type of offset project.

In terms of technology-based solutions, direct carbon/air capture and carbon mineralization offsets permanently remove CO₂ quickly with low rates of carbon re-emission. Energy-efficiency offsets bolster energy security and aid in the transition away from fossil fuels. Waste management and agricultural offsets target CH₄ emissions from landfills and agricultural processes.

In terms of nature-based solutions, reforestation, afforestation, biochar, and agroforestry offsets reinforce our terrestrial carbon sinks, whereas blue carbon offsets reinforce our marine carbon sink. REDD+ offsets protect existing forests, which is time and cost-effective. In general, nature-based offsets can continue to reduce emissions after project lifespans.

The top carbon offsets are those offered by companies whose projects are verified by recognized standards. But although carbon offsets can instigate meaningful change, they should not be seen as the only solution to climate change. In the long term, they fail to reduce CO₂ enough to mitigate climate change for future generations. 

When used in conjunction with direct CO₂ reduction measures, carbon offsets can be much more effective. We should reduce our own carbon footprint as much as possible first, and only then choose carbon offsets.

Stay impactful,

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