Carbon Reduction Offsets Explained: All You Need to Know
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Reducing human-derived atmospheric carbon dioxide (CO2) emissions now is crucial for maintaining a healthy planet for future generations. When partnered with carbon offsets, carbon reduction could have a greater impact. So, we had to ask: What are carbon reduction offsets really, and could they help us mitigate climate change?
Carbon reduction offsets are a specific type of carbon offset whereby individuals or organizations reduce emissions through efficiencies. Reduction projects reduce CO2 emissions by supporting energy efficiency projects and projects that protect existing terrestrial and marine ecosystems.
Keep reading to find out all about what carbon reduction 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 reduction offsets can help mitigate climate change and what better alternatives to them are.
The Big Picture of Carbon Reduction Offsets
Carbon offsets are reductions in carbon emissions that are used to compensate for carbon emissions occurring elsewhere. They are measured in tons of CO2 equivalents and are bought and sold through international brokers, online retailers, and trading platforms on what is known as the global carbon offset market.
“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 reductions refer to the decrease of carbon emissions as a result of activity between two points in time. Typically, an individual or organization reduces greenhouse gas (GHG) emissions via efficiencies.
“Emission reduction: The act or process of limiting or restricting the discharge of pollutants or contaminants, such as by setting emission limits or by modifying the emission source.”
United Nations Environment Programme
In the context of carbon credits, carbon emission reductions are quantified relative to a baseline scenario, or the business-as-usual carbon emissions.
| What are carbon reduction offsets | Carbon reduction offsets are a specific type of carbon offset whereby individuals or organizations reduce emissions through efficiencies. |
| How do carbon reduction offsets work | Carbon reduction projects reduce CO2 emissions by supporting energy efficiency projects and projects that protect existing terrestrial and marine ecosystems. |
| How effective and efficient are carbon reduction offsets | Effectiveness: Carbon reduction offsets help reduce deforestation, strengthen our natural carbon sinks, bolster energy security, and aid in the transition away from fossil fuels. However, they can also lack permanence and additionality. They also do not reduce your own carbon emissions, which can lead to greenwashing. Efficiency: Carbon reduction offsets chiefly preserve existing terrestrial and marine forests, promote energy decentralization, and are relatively cost-effective. However, they only avoid CO2 emissions during their project life span, can have a high rate of carbon re-emission, and can lack standardization and monitoring. |
| What are the pros of carbon reduction offsets | 1. Carbon reduction offsets reduce deforestation and strengthen our natural carbon sinks 2. Carbon reduction offsets bolster energy security and help transition away from fossil fuels 3. Carbon reduction offsets promote energy decentralization 4. Carbon reduction offsets help maintain water quality 5. Carbon reduction offsets preserve biodiversity 6. Carbon reduction offsets are relatively cost-effective |
| What are the cons of carbon reduction offsets | 1. Carbon reduction offsets can lack additionality 2. Carbon reduction offsets can lack permanence 3. Identifying the baseline for REDD+ projects can be inaccurate 4. Carbon reduction offsets can lack standardization and monitoring 5. Carbon reduction offsets do not reduce your own carbon emissions, which can lead to greenwashing |
| What are the best carbon reduction offsets | The best carbon reduction offsets are offered by Carbonfund, REDD.plus, and Sustainable Travel International which offer REDD+, energy efficiency, and blue carbon offset projects. In addition, DelAgua, Wildlife Works, and South Pole also specialize in these types of carbon reduction offsets. |
| How can carbon reduction offsets help mitigate climate change | Carbon reduction can specifically help mitigate climate change because it reduces atmospheric carbon, which when emitted, can remain in our atmosphere for a long period of time. |
What Are Carbon Reduction Offsets
Carbon reductions refer to the decrease of carbon emissions as a result of activity between two points in time. Typically, an individual or organization reduces greenhouse gas (GHG) emissions via efficiencies.
“Emission reduction: The act or process of limiting or restricting the discharge of pollutants or contaminants, such as by setting emission limits or by modifying the emission source.”
United Nations Environment Programme
Carbon offsets that can be classified as carbon reductions include:
How Do Carbon Reduction Offsets Work
In the context of carbon credits, carbon emission reductions are quantified relative to a baseline scenario, or the business-as-usual carbon emissions.
Carbon reduction offsets are closely related to carbon avoidance offsets, which fund carbon emission reduction projects that prevent CO2 from entering the atmosphere. Common examples include projects that install clean cookstoves and those that prevent the cutting down of trees.
In short, carbon reduction offsets are a combination of carbon offsets and carbon reduction, whereby individuals or organizations are paid to reduce their GHG emissions.
How Effective and Efficient Are Carbon Reduction Offsets
In terms of effectiveness, carbon reduction offsets help reduce deforestation, strengthen our natural carbon sinks, bolster energy security, and aid in the transition away from fossil fuels. However, they can also lack additionality and permanence. They also do not reduce your own carbon emissions, which can lead to greenwashing.
In terms of efficiency, carbon reduction offsets chiefly preserve existing terrestrial and marine ecosystems, promote energy decentralization, and are relatively cost-effective. However, they may only reduce CO2 emissions during their project life span, have a high rate of carbon re-emission, and lack standardization and monitoring.
Carbon reduction offsets are effective at mitigating climate change because:
- Carbon reduction offsets involving REDD+, energy-efficiency, and blue carbon combat deforestation and reinforce our terrestrial and marine carbon sinks.
- Carbon reduction offsets involving energy efficiency can help reduce reliance on biomass and fossil fuels, leading to increased energy security and energy independence.
However, carbon reduction offsets can also lack effectiveness because
- Carbon reduction offsets involving REDD+ and energy efficiency can lack additionality and permanence.
- Carbon reduction offsets involving REDD+, energy efficiency, and blue carbon do not reduce your own carbon emissions, which can lead to greenwashing.
Carbon reduction offsets are efficient at reducing CO2 emissions because:
- Carbon reduction offsets involving energy efficiency promote energy decentralization.
- REDD+ offsets preserve existing terrestrial and marine ecosystems.
- Carbon reduction offsets involving REDD+, energy efficiency, and blue carbon are some of the most cost-effective methods of carbon emission reduction.
However, carbon reduction offsets can also lack efficiency because:
- REDD+ offsets avoid emissions only during project lifespans.
- Carbon reduction offsets involving energy efficiency and blue carbon can lack standardization and monitoring due to a variety of factors.
What Are The 6 Pros and 5 Cons of Carbon Reduction Offsets
Carbon reduction offsets reduce deforestation and strengthen our natural carbon sinks, bolster energy security and help transition away from fossil fuels, promote energy decentralization, help maintain water quality, preserve biodiversity, and are relatively cost-effective.
Carbon reduction offsets can lack additionality, permanence, standardization, and monitoring. In addition, identifying the baseline for REDD+ projects can be inaccurate, and carbon reduction offsets do not reduce your own carbon emissions, which can lead to greenwashing.
What Are the 6 Pros of Carbon Reduction Offsets
Carbon reduction offsets reduce deforestation and strengthen our natural carbon sinks, bolster energy security, help transition away from fossil fuels, promote energy decentralization, help maintain water quality, preserve biodiversity, and are relatively cost-effective.
| 6 Pros of Carbon Reduction Offsets | Quick Facts |
| #1: Carbon reduction offsets reduce deforestation and strengthen our natural carbon sinks | Carbon reduction offsets involving REDD+, energy-efficiency, and blue carbon combat deforestation and reinforce our terrestrial and marine carbon sinks. |
| #2: Carbon reduction offsets bolster energy security and help transition away from fossil fuels | Carbon reduction offsets involving energy efficiency can help reduce reliance on biomass and fossil fuels, leading to increased energy security and energy independence. |
| #3: Carbon reduction offsets promote energy decentralization | Carbon reduction offsets involving energy efficiency promote energy decentralization. |
| #4: Carbon reduction offsets help maintain water quality | Carbon reduction offsets involving REDD+ and blue carbon bolster terrestrial and marine ecosystems, which play an important role in maintaining water quality. |
| #5: Carbon reduction offsets preserve biodiversity | Carbon reduction offsets involving REDD+ and blue carbon bolster our terrestrial and marine ecosystems, which act as habitats for vast numbers of marine plant and animal species. |
| #6: Carbon reduction offsets are relatively cost-effective | Carbon reduction offsets involving REDD+, energy efficiency, and blue carbon are some of the most cost-effective methods of carbon emission reduction. |
What Are the 5 Cons of Carbon Reduction Offsets
Carbon reduction offsets can lack additionality, permanence, standardization, and monitoring. In addition, identifying the baseline for REDD+ projects can be inaccurate, and carbon reduction offsets do not reduce your own carbon emissions, which can lead to greenwashing.
| 5 Cons of Carbon Reduction Offsets | Quick Facts |
| #1: Carbon reduction offsets can lack additionality | Carbon reduction offsets involving REDD+ and energy efficiency can lack additionality. |
| #2: Carbon reduction offsets can lack permanence | Carbon reduction offsets involving REDD+ and blue carbon lack permanence because they are reversible, nature-based solutions. |
| #3: Identifying the baseline for REDD+ projects can be inaccurate | It is impossible to calculate the REDD+ baseline with absolute certainty, which can lead to an overestimation of carbon emissions reductions and overissuance of carbon credits. |
| #4: Carbon reduction offsets can lack standardization and monitoring | Carbon reduction offsets involving energy efficiency and blue carbon can lack standardization and monitoring due to a variety of factors. |
| #5: Carbon reduction offsets do not reduce your own carbon emissions, which can lead to greenwashing | If emissions are only offset and not reduced from the source, this could lead to greenwashing, when the consumer is deceived into thinking they are offsetting their emissions but in reality, they are not. |
How Could You Offset Your Own Carbon Footprint With Carbon Reduction 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 Ecosystem Marketplace predicts the VCM can grow to $50B by the year 2050. And because carbon reduction offsets are cost-effective and efficient at reducing carbon emissions, they are predicted to make up an increasingly larger share of this market.
| Carbon Reduction Offset Company | Quick Facts |
| Carbonfund | About: Purchases support clean cookstoves, water filtration, waste co-generation, and tailpipe emissions reduction energy-efficiency projects as well as REDD+ projects. Costs: $16.25-$17.16 per 1,000kg of CO2 for individuals, $390-$1,560 per year for small businesses, determined after initial contact for large businesses |
| REDD.plus | About: Carbon offset purchases support UNFCCC-verified REDD+ projects around the globe. REDD.plus is a central registry and exchange for REDD+ Result Units, a type of carbon credit. Costs: $16 per ton of CO2 |
| Sustainable Travel International | About: Carbon offset purchases support the Katingan Mentaya Blue Carbon Project. This project protects and restores 370,000+ acres of peat swamp forest in Borneo. Costs: $16 per 1,000kg of CO2 |
| DelAgua | About: Purchases support the Rwandan clean cookstoves energy-efficiency carbon offset project. Costs: Costs are determined after initial contact |
| Wildlife Works | About: Carbon offset purchases support third-party certified carbon offset projects including The Kasigau Corridor, Mai Ndombe, and Southern Cardamom REDD+ projects in Kenya, Cambodia, and Colombia respectively. Costs: $20 per ton of CO2 |
| South Pole | About: Purchases support energy-efficiency carbon offset projects including clean cookstoves in China, Mali, and Rwanda. Costs: Costs are determined after initial contact |
| InfinteEARTH | About: Carbon offset purchases support the third-party certified Rimba Raya Biodiversity Reserve REDD+ project in Borneo. Costs: Determined after initial contact |
| Ecologi | About: Purchases support energy-efficiency carbon offset projects including efficient cookstoves in Kenya, Tanzania, Zambia, Ghana, and Honduras. Costs: $6.04 per 1,000 kg of CO2 offset |
| Biofilica | About: Carbon offset purchases support third-party certified REDD+ projects that protect six areas of the Brazilian Amazon rainforest. Costs: Determined after initial contact |
| myclimate | About: Carbon offset purchases support the Blue Forests for Coral Reef Protection project, which protects over 2,400 acres of mangrove forests in Madagascar. Costs: $23-$30 per 1,000kg of CO2 |
How Can Carbon Reduction Offsets Help Mitigate Climate Change
Climate change is a severe and long-term consequence of fossil fuel combustion. Carbon reduction offsets can help mitigate climate change because they reduce atmospheric carbon levels. If left untreated, carbon can remain in our atmosphere 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, it traps the heat and acts 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.
As outlined in the 2015 Paris Climate Agreement, we must cut current greenhouse gas (GHG) emissions by 50% by 2030 and reach net zero by 2050. Carbon reduction is important to meet these targets because it lowers the amount of carbon in our atmosphere, which can remain in our atmosphere for tens of thousands of years.
How Do Carbon Reduction Offsets Specifically Help Mitigate Climate Change
REDD+ offsets specifically help mitigate climate change because they protect terrestrial forests, which remove CO2 from the air as they grow. By slowing deforestation rates, we can maintain the amount of carbon they are capable of storing. The more carbon our forests can sequester, the less carbon there is in our atmosphere.
Energy-efficiency offsets specifically help mitigate climate change by reducing CO2 emissions from direct fossil fuel combustion and from indirect electricity generation. By using energy-efficient appliances and methodologies, we reduce the amount of CO2 entering 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.
Final Thoughts
Carbon reduction offsets help lower carbon emissions by protecting existing biomass stocks (terrestrial and marine) and switching to energy-efficient practices. Their effectiveness and efficiency highly depend on the type of reduction.
REDD+ and blue carbon offsets reinforce our carbon sinks and reduce deforestation, which helps maintain the amount of carbon these ecosystems can store. Energy-efficiency offsets reduce CO2 emissions from direct fossil fuel combustion and from indirect electricity generation, bolstering energy security and promoting energy independence. All three reduce emissions immediately and are cost-effective.
The top carbon sequestration offsets are those offered by companies whose reduction 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 reduction offsets.
Stay impactful,
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