Carbon reduction is one method to lower atmospheric carbon dioxide (CO₂) levels. The effectiveness and efficiency of carbon reduction offsets vary based on the specific type of reduction. So, we had to ask: How effective and efficient are carbon reduction offsets?

Carbon reduction offsets effectively reduce deforestation and forest degradation, promote energy security, and transition away from fossil fuels; they efficiently and cost-effectively reduce emissions by promoting energy decentralization and protecting existing terrestrial and marine ecosystems.

Keep reading to find out how efficient and effective blue carbon offsets are, how you can offset your carbon footprint with them, what their pros and cons are, how they can mitigate climate change, and what better alternatives to carbon reduction offsets are. 

The Big Picture of the Effectiveness and Efficiency 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 offsets are trade-offs, whereby companies receive credits for financially supporting external projects that reduce emissions.

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.

Carbon offsets that can be classified as carbon reductions include:

• Reducing Emissions from Deforestation and Forest Degradation (REDD+)
• Energy efficiency
• Blue Carbon

Here’s How Effective and Efficient Carbon Reduction Offsets Are

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 permanence and additionality. 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 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.

How Effective Are Carbon Reduction Offset Programs at Reducing CO₂ Emissions

Effectiveness involves completing a task with a desired outcome, typically a successful one. 

“Effective: producing the result that is wanted or intended; producing a successful result”

Oxford Dictionary

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. Plus, they do not reduce your own carbon emissions, which can lead to greenwashing.

Carbon Reduction Offsets Help 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.

Deforestation is the main threat to our terrestrial forests, and it occurs at approximately 10 million hectares (~25 million acres) per year. The past 40 years have seen a 17% decline in forest extent in the Amazon rainforest alone. 

REDD+ is a mechanism aimed at reducing current tropical rainforest deforestation rates and preventing further forest degradation. REDD+ carbon offsets put a financial value on rainforests and the carbon stored within them. Landowners are either compensated directly for not clearing or degrading forests, or carbon credits are issued for the amount of avoided carbon emissions.

In addition, energy-efficient cookstoves can help combat deforestation. Nearly 3 billion people worldwide still rely on biomass (e.g., wood, charcoal, crop residue, dung) for cooking and to meet their energy demands. And up to 34% of wood harvests are obtained via unsustainable practices, leading to forest degradation and deforestation. Energy-efficient cookstoves and water filtration projects reduce the demand for wood, which in turn reduces the need to cut down trees.

Nature-based solutions involving REDD+ and blue carbon also store carbon in vegetation (forests), soils, and oceans, which are commonly referred to as our carbon sinks. 

“Carbon Sink: an area of forest that is large enough to absorb large amounts of carbon dioxide from the earth’s atmosphere and therefore to reduce the effect of global warming”

Cambridge Dictionary 

Tropical rainforests are capable of absorbing 2.4 billion tons of CO₂ every year. The Amazon Basin contains roughly 2.8 million square miles of rainforest, roughly half of the remaining tropical rainforest on the planet. This area is estimated to store roughly 123 billion tons of carbon above and below ground, making it one of our most important carbon sinks.

And if undisturbed, blue carbon ecosystems can absorb enough carbon to keep pace with moderate sea level rise. In the top meter of soil alone, mangroves can store an average of 1,494 tons of CO₂ per hectare (ha), seagrass meadows 951, and tidal marshes 607. But the real carbon storage potential is underground, with 50–99% of the carbon stored in blue ecosystems located in the soil underground. 

In short, carbon reduction offsets involving REDD+, energy-efficiency, and blue carbon combat deforestation and reinforce our terrestrial and marine carbon sinks.

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.

Overall, energy-efficient mechanisms use less energy than traditional mechanisms to perform the same task. This reduces overall energy demand, which in turn reduces reliance on imports of biomass fuels or fossil fuels (e.g., coal, oil, and natural gas). 

For example, energy-efficient cookstoves and water filtration projects provide uninterrupted access to energy and clean water, negating the need for a constant supply of woodfuels. And co-generation facilities use surplus waste gasses to generate electricity and steam, reducing the need to import fossil fuels.

Being able to produce your own energy without relying on other entities increases energy security, which is reliable, affordable access to fuels and energy sources. And increased energy security fosters energy independence, which can aid in the transition away from fossil fuels and towards lower carbon options.

In short, energy-efficiency offsets bolster energy security and can lead to energy independence.

Carbon Reduction Offsets Can Lack Additionality

To be beneficial, REDD+ and energy-efficiency carbon offsets must be additional. This means the carbon emissions reductions would not have occurred without REDD+ interventions. 

But REDD+ projects are often not additional because assessing what would have happened (but did not happen), cannot be measured exactly. If REDD+ offset programs are not additional, then offsetting rather than directly reducing your emissions can actually worsen the effects of climate change.

Energy-efficiency projects are also often not additional because many projects receiving revenue now would have been built regardless. Since 2020, global markets have contributed approximately $1 trillion towards energy efficiency-related practices involving buildings, transportation, infrastructure, and electric vehicles. The large demand for energy-efficient practices, in general, means that the infrastructure could have been built independently of energy-efficiency carbon offsets. 

In short, additionality is not guaranteed with REDD+ or energy-efficiency offsets because many projects are already in high demand, and knowing what would have happened cannot be measured exactly.

Carbon Reduction Offsets Can Lack Permanence

To be effective, REDD+, energy efficiency, and blue carbon offset projects must be permanent, in the sense that there must be a full guarantee against reversals of carbon emission for the foreseeable future. 

However, nature-based solutions involving REDD+ and blue carbon can lack permanence because they are reversible. Rather than storing the carbon in permanent reservoirs (i.e. underground in rock formations), carbon is stored in biomass (trees). 

Once a tree is protected by a REDD+ or blue carbon project, it should never be removed in order to guarantee permanence. But trees die naturally, and environmental disasters such as floods, fires, changes in land use, and climate change itself can negate any permanence. 

In addition, blue carbon ecosystems are currently being degraded at 4 times the rate of tropical forests. We are currently losing mangroves, seagrasses, and tidal marshes at a rate of 2%, 1.5%, and 1-2% per year, respectively.

Climate change is one of the leading factors that can negate blue carbon permanence. Coastal ecosystems are especially sensitive to sea level rise, storm intensity, and rising ocean temperatures, all of which have been occurring at an accelerated rate. Ocean acidification, a result of warming ocean temperatures, particularly threatens these ecosystems and the biodiversity they harbor.

In short, nature-based solutions like REDD+ lack permanence because they are reversible.

Carbon Reduction Offsets Do Not Reduce Your Own Carbon Emissions, Which Can Lead To Greenwashing

Carbon reduction offsets involving REDD+, energy efficiency, and blue carbon do not reduce your own carbon emissions, which can lead to greenwashing.

In general, one of the main limitations of carbon offsetting is that purchasing a carbon offset does not directly reduce your carbon footprint. It only makes others reduce their carbon footprint to compensate for your carbon footprint. 

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. Companies accused of greenwashing either invest in non-verified credits, do not prioritize in-house emissions reductions, or double-count carbon credits. Or sometimes, all of the above.

In short, because REDD+, energy-efficiency, and blue carbon offsets do not reduce your own carbon emissions, they could lead to greenwashing.

How Efficient Are Carbon Reduction Offset Programs at Mitigating Climate Change

Efficiency involves performing a task while using the least amount of resources and producing the least amount of waste as possible.

“Efficient: working in a way that does not waste a resource (= something valuable such as fuel, water, or money)”

Cambridge Dictionary

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 Promote Energy Decentralization

Carbon reduction offsets involving energy efficiency promote energy decentralization.

Our traditional power and power-delivery system is centralized, meaning power is generated at a large scale at one location and then transmitted to wherever it is needed. However, a centralized system negatively affects the environment because centralized systems largely depend on nonrenewable resources (i.e., coal and natural gas) to generate electricity. 

On the other hand, energy-efficient practices promote energy decentralization, where power is generated at or near locations where it will be used. This decreases the need to transport energy and generates environmental benefits associated with a lower carbon footprint. 

For example, clean cookstoves are a decentralized, energy-efficiency solution whereby cookstoves are distributed throughout communities. Rather than depending on power from a central location, individual families can utilize their own power in their homes.

In short, energy-efficiency offsets promote decentralized energy solutions, which generate environmental benefits associated with a lower carbon footprint.

Carbon Reduction Offsets Chiefly Preserve Existing Terrestrial And Marine Ecosystems

REDD+ offsets chiefly protect existing forests from deforestation, rather than creating new forests first and then protecting those forests. And blue carbon offsets are a specific type of carbon offset that focuses on the preservation of over 120 million acres of blue carbon coastal and marine ecosystems. 

Protecting existing forests and marine ecosystems, rather than creating new ones, is more time effective because finding suitable land and physically planting the vegetation to create new environments takes time. Carbon emissions can also be reduced immediately when you protect existing vegetation, whereas creating new vegetation requires waiting for the trees to first reach maturity before they can begin to reduce carbon emissions.

In short, REDD+ and blue carbon offsets protect existing forests and marine ecosystems, which is more time and cost-effective than other methods of carbon emission reduction. 

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.

Coupling REDD+, energy efficiency, and blue carbon offset projects with carbon offsets could help finance the arduous task of reducing atmospheric CO₂ levels. Especially since these offsets are typically more cost-effective than other categories of offsets. 

• REDD+ carbon offsets from leading providers (e.g., REDD.plus, Pachama, and Wildlife Works) cost less than $30 per ton of CO₂ offset.
• Energy-efficiency offsets from leading providers (e.g., Carbonfund, Ecologi, myclimate) cost less than $40 per ton of CO₂ offset.
• Blue carbon offsets from leading providers (e.g., The Ocean Foundation, One Tree Planted, and Reforest’Action) cost less than $20 per ton of CO₂ offset. 

In short, carbon reduction offsets involving REDD+, energy efficiency, and blue carbon are relatively cost-effective when compared to other methods of carbon emission reduction.

Carbon Reduction Offsets May Only Reduce CO₂ Emissions During Their Project Life Span 

REDD+ projects tend to have relatively long lifespans because it takes time to develop projects, monitor project impacts, and report verified emissions reductions. But once that time span is over, the forest is no longer protected and may be subjected to deforestation. 

Additionally, high rates of carbon re-emission can occur either from inaccurate calculations of baseline emissions affecting additionality or from the risk of environmental disasters such as floods, fires, changes in land use, and climate change itself negating permanence. 

In short, REDD+ offsets avoid emissions only during project lifespans, and REDD+ projects may have high rates of carbon re-emission due to a lack of additionality and permanence.

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.

Energy-efficient practices promote energy decentralization, where power is generated at or near locations where it will be used. And although this decreases the need to transport energy and generates environmental benefits, it can also make project standardization and monitoring difficult.

By nature, centralized solutions are easier to keep track of. But there are different standards for different types of energy-efficiency practices. Appliances, lighting, buildings, cooking, and fuels are held to different standards, making it difficult to standardize energy efficiency as one singular entity. 

In addition, whereas the storage of carbon in terrestrial ecosystems is well documented and managed via the REDD+ mechanism, there is no overarching mechanism to regulate the carbon stored in coastal, marine, or wetland soils and biomass.

Leading standards all have different methodologies for assessing blue carbon. 

• Verra released the first blue carbon methodology modeled after the REDD+ mechanism in 2020. 
• The Gold Standard is developing their own methodology not based on REDD+.
• The American Carbon Registry has two methodologies, Restoration of Pocosin Wetlands and Restoration of California Deltaic Coastal Wetlands. 
• Salesforce and the World Economic Forum launched the High-Quality Blue Carbon Principles and Guidance carbon credit methodology in 2022.

A lack of standardization can also lead to a lack of certified projects available on the voluntary carbon offset market (VCM). 

In short, energy efficiency and blue carbon offsets can lack standardization and monitoring due to a lack of over-arching mechanisms and a decentralized nature. 

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.

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.

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.

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. 

What Are Better Alternatives to Carbon Reduction Offsets

If used correctly, carbon reduction 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 reduction offsets must be used in conjunction with direct carbon reduction measures in order to reduce CO₂ 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 reduction 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 reduction offsets. 

Final Thoughts

Carbon reduction offsets face varying levels of effectiveness and efficiency depending on the type of reduction.

REDD+ and blue carbon offsets cost-effectively reduce deforestation and reinforce our carbon sinks; however, they may lack permanence, standardization, and monitoring.

Energy-efficiency offsets bolster energy security, aid in the transition away from fossil fuels, and promote energy decentralization; however, they may lack additionality, standardization, and monitoring.

Carbon offsets can instigate meaningful change, but they should not be seen as the only solution to climate change. When used in conjunction with direct CO₂ reduction measures, carbon offsetting can be much more effective. We should reduce our own carbon footprint as much as possible first, and only then choose the most effective carbon reduction offsets.

Stay impactful,

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