By
Grace Smoot

Energy-efficiency measures aim to do as their name states, to make traditional mechanisms more efficient. Energy-efficient mechanisms require less energy to operate, which, in the context of climate change, means fewer carbon dioxide (CO₂) emissions entering our atmosphere. So, we had to ask: how effective and efficient are energy-efficiency carbon offsets?

Energy-efficiency carbon offsets are effective as they reduce deforestation and bolster energy security; but they can also lack additionality. They are efficient as they avoid CO₂ emissions immediately and promote energy decentralization; however, they do not reduce your own carbon emissions.

Keep reading to find out how efficient and effective energy-efficiency 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 reforestation carbon offsets are. 

The Big Picture of the Effectiveness and Efficiency of Energy-Efficiency Carbon 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 reforestation”

Oxford Dictionary

Energy efficiency describes products or systems that use less energy than conventional systems to perform the same task. Energy-efficiency carbon offsets are a specific type of carbon offset that upgrade conventional systems into energy-efficient ones. 

“Energy efficiency: the use of less energy to perform the same task or produce the same result.”

U.S. Department of Energy

Examples of energy-efficiency projects include: 

• Energy-efficient solutions for disadvantaged households
• Energy-efficient buildings use less energy to heat and cool
• Energy-efficient facilities use less energy to manufacture goods
• Energy-efficient transportation reduces fuel usage

Some of the most common energy-efficiency projects involve energy-efficient cookstoves, water filtration programs, and co-generation facilities.

In general, energy-efficiency projects save money, increase the resiliency of our power grid, positively impact public health, and mitigate climate change. 

How Do Energy-Efficiency Carbon Offsets Work	Energy-efficiency offsets are a specific type of carbon offset that develops products or systems that use less energy than conventional systems to perform the same task. Energy-efficiency projects reduce CO2 emissions by replacing inefficient products with those that emit less carbon and have fewer negative environmental effects.
How Effective Are Energy-Efficiency Offsets at Mitigating Climate Change	Energy-efficiency offsets help reduce deforestation and strengthen our natural carbon sinks Energy-efficiency offsets bolster energy security and help transition away from fossil fuels Energy-efficiency offsets can lack additionally Energy-efficiency offsets do not reduce your own carbon emissions, which can lead to greenwashing
How Efficient Are Energy-Efficiency Offsets at Reducing CO2 Emissions	Energy-efficiency offsets avoid carbon emissions immediately Energy-efficiency offsets promote energy decentralization Energy-efficiency offsets are relatively cost-effective Energy-efficiency offsets can lack standardization and monitoring

Here’s How Effective and Efficient Energy-Efficiency Carbon Offsets Are

In terms of effectiveness, energy-efficiency carbon offsets help reduce deforestation and strengthen our natural carbon sinks, and bolster energy security to help transition away from fossil fuels. However, they can also lack additionality, and they do not reduce your own carbon emissions, which can lead to greenwashing.

In terms of efficiency, energy-efficiency carbon offsets avoid carbon emissions immediately, promote energy decentralization, and are relatively cost-effective. However, they can also lack standardization and monitoring.

How Effective Are Energy-Efficiency Carbon 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

Energy-efficiency carbon offsets are effective at mitigating climate change because they help reduce deforestation and strengthen our natural carbon sinks, and bolster energy security to help transition away from fossil fuels. However, they can also lack additionality, and they do not reduce your own carbon emissions, which can lead to greenwashing.

Energy-Efficiency Carbon Offsets Help Reduce Deforestation and Strengthen Our Natural Carbon Sinks

Deforestation is the main threat to our forests, occurring at approximately 10 million hectares (~25 million acres) per year. In total, our planet has lost more than 1/3 of its forest since the last ice age, which occurred about 2.6 million years ago. 

Energy-efficient cookstoves are one of the most common energy-efficiency offset projects because they 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. This is important in the fight against climate change because globally, forests act as a carbon sink capable of absorbing a net 7.6 billion tons (bt) of CO₂ per year. They also are important for producing oxygen, maintaining water quality, and regulating the water cycle.

In short, energy efficiency can help reduce forest degradation and deforestation because it reduces the demand for woodfuels. 

Energy-Efficiency Carbon Offsets Bolster Energy Security and Help Transition Away From Fossil Fuels

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, or reliable, affordable access to fuels and energy sources. And increased energy security fosters energy independence, the main goal of which is to transition fully away from fossil fuels.

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

Energy-Efficiency Carbon Offsets Can Lack Additionality

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

But energy-efficiency projects are often not additional because most projects receiving revenue now would have been built regardless. 

One of the main pros of energy efficiency is lower energy costs, which can drive market expansion. 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 would have been built independently of energy-efficiency carbon offsets. 

In short, additionality is not guaranteed with energy-efficiency offsets because these projects are already in high demand and would have been built regardless.

Energy-Efficiency Carbon Offsets Do Not Reduce Your Own Carbon Emissions, Which Can Lead To Greenwashing

We already have governmental-level policies in place to reduce carbon emissions, but carbon offsets allow us to reduce emissions from activities where sustainable alternatives are not yet widely available. 

Carbon offsets are designed for situations where your emissions are impossible to reduce. For example, we can only do so much to reduce our individual carbon footprints. Using public transportation, washing with cold water, and switching from single-use to sustainable products lowers our carbon footprint, but it does not eliminate them completely. This is where energy-efficiency offsets come into play, to reduce carbon emissions in other areas as compensation for the remainder of our carbon emissions.

In short, energy-efficiency offsets allow us to reduce carbon emissions in ways we wouldn’t be able to accomplish individually.

How Efficient Are Energy-Efficiency Carbon 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 possible.

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

Cambridge Dictionary

Energy-efficiency carbon offsets are efficient at reducing CO₂ emissions because they avoid carbon emissions immediately, promote energy decentralization, and are relatively cost-effective. However, they can also lack standardization and monitoring.

Energy-Efficiency Carbon Offsets Avoid Carbon Emissions Immediately

As soon as energy-efficient mechanisms are installed, switched on, or implemented, they begin reducing CO₂ emissions because they use less energy to perform the same task as traditional methods. 

The immediate reduction in carbon emissions is important because the average concentration of CO₂ in our atmosphere currently registers at over 400 parts per million (ppm). And it has increased 100 times faster over the past 60 years.

Burning woodfuels alone results in approximately 1 gigaton (1 billion tons) of CO₂ equivalents annually, which equals roughly 2% of our global CO₂ emissions. Energy-efficient cookstoves can reduce these emissions by an average of 50-80%, which limits the amount of carbon entering our atmosphere. Water filtration programs also reduce the use of traditional firewood as fuel to boil water.

Also, one of the more harmful pollutants released from burning wood fuels is black carbon, which consists mostly of particulate matter (PM) and has a global warming impact that is 460-1,500 times stronger than CO₂. If we reduce black carbon emissions, we can reduce global warming impacts at a greater rate.

In short, energy-efficiency practices emit less carbon, which leads to reductions in atmospheric carbon and immediate climate change mitigation.

Energy-Efficiency Carbon Offsets 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 generating power at a central location, individual families can generate their own power in their homes.

In short, energy-efficiency offsets promote decentralized energy solutions. 

Energy-Efficiency Carbon Offsets Are Relatively Cost-Effective

Energy-efficiency carbon offsets are not just cost-effective, but the externality costs of inaction are dire. For example, the total cost of relying on polluting stoves and fuels is estimated to be around $2.5 trillion per year, with the majority of these costs coming from health costs. While the total estimate to provide universal access to clean cooking methods is $4.5 billion (once, not per year). Energy-efficiency carbon offsets are one of the ways to bridge the health gap and make energy-efficient methods more accessible and affordable.

For example, energy-efficiency offsets from leading providers (e.g., Carbonfund, Ecologi, myclimate) cost less than $40 per ton of CO₂ offset. Compare this to direct carbon capture offsets which can cost anywhere from $100-$1,200 per ton of CO₂. 

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

Energy-Efficiency Carbon Offsets Can Lack Standardization and Monitoring

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. And there are also 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 short, energy efficiency benefits the environment as a decentralized solution, but it also can lead to a lack of standardization and monitoring.

How Could You Offset Your Own Carbon Footprint With Energy-Efficiency 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 Ecosystem Marketplace predicts the VCM can grow to $50B by the year 2050. And because energy-efficiency carbon offsets are effective and efficient at reducing carbon emissions, they could make up an increasingly larger share of this market. Below are our favorite energy-efficiency offsets.

Energy-Efficiency Carbon Offset Company	Quick Facts
Carbonfund	About: Purchases support energy-efficiency carbon offset projects including efficient cookstoves, water filtration, waste co-generation, and tailpipe emissions reduction. 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
DelAgua	About: Purchases support the Rwandan clean cookstoves energy-efficiency carbon offset project. Costs: Costs are determined after initial contact
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
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
myclimate	About: Purchases support energy-efficiency carbon offset projects including efficient cookstoves in Kenya, Bolivia, Peru, and Madagascar.  Costs: $ 23-$30 per 1,000kg of CO2
GoClimate	About: Purchases support energy-efficiency carbon offset projects including the clean-burning stoves in Kenya project. Costs: $16.99 per 1,000kg of CO2 for monthly subscriptions, B2B determined after initial contact.
CarbonClick	About: Purchases support energy-efficiency carbon offset projects including the Improved Cooking Practices in Nigeria project. Costs: $20 per 1,000kg of CO2
Clear	About: Purchases support energy-efficiency carbon offset projects including improved cookstoves in Kenya and Malawi. Costs: 18.99-$25 per 1,000kg of CO2
Wren	About: Purchases support the clean cooking fuel for Refugees project in Uganda, which converts farming waste into charcoal bricks to be used as cooking fuel. Costs: $19.80 per 1,000 kg of CO2 offset
Native Energy	About: Purchases support energy-efficiency carbon offset projects including the Madagascar Solar and Efficient Cookstoves project. Costs: $15.50 per 1,000 kg of CO2
Cool Effect	About: Purchases support energy-efficiency carbon offset projects including the Breath of Fresh Air clean cookstoves project in Honduras, which builds cookstoves in rural communities. Costs: $8.79 – $21.97 per 1,000 kg of CO2
Zero Smart	About: Purchases support energy-efficiency carbon offset projects including the efficient cookstoves project in Eritrea, which empowers local women to build, install and maintain fuel-efficient cookstoves. Costs: $5.37 – $5.97 per 1,000 kg of CO2
3Degrees	About: Purchases support energy-efficiency carbon offset projects including the BioLite Improved Stove Programme in Uganda, which provides communities with ultra-clean burning fan-assisted wood stoves that reduce air pollution. Costs: Costs are determined after initial contact
Co2nsensus	About: Purchases support energy-efficiency carbon offset projects including efficient cookstoves in Kenya and geothermal and solar energy in Turkey. Costs: Costs are determined after initial contact

What Are The 7 Pros and 3 Cons of Energy-Efficiency Carbon Offsets

Energy-efficiency carbon offsets avoid carbon emissions immediately, improve air quality, reduce deforestation and strengthen our natural carbon sinks, promote energy decentralization, bolster energy security and help transition away from fossil fuels, are relatively cost-effective, and allow us to reduce carbon emissions in ways we wouldn’t be able to accomplish individually.

Energy-efficiency carbon offsets can lack additionality, standardization, and monitoring, and they do not reduce your own carbon emissions which can lead to greenwashing.

What Are the 7 Pros of Energy-Efficiency Carbon Offsets

Energy-efficiency carbon offsets have various pros that make them effective at avoiding carbon emissions.

7 Pros of Energy-Efficiency Carbon Offsets	Quick Facts
#1: Energy-efficiency offsets avoid carbon emissions immediately	As soon as energy-efficient mechanisms are installed, switched on, or implemented, they begin reducing CO2 emissions because they use less energy to perform the same task as traditional methods.
#2: Energy-efficiency offsets improve air quality	Energy-efficient cooking, heating, and lighting mechanisms can reduce the amount of total air pollution, improving overall air quality and human health as a result. For example, energy-efficient cookstoves can help reduce fuel use by 30-60%, leading to less harmful emissions.
#3: Energy-efficiency offsets help reduce deforestation and strengthen our natural carbon sinks	Energy-efficient cookstoves and water filtration projects reduce the demand for wood, which in turn reduces the need to cut down trees. This is important in the fight against climate change because globally, forests act as a carbon sink capable of absorbing a net 7.6 billion tons (bt) of CO2 per year.
#4: Energy-efficiency offsets bolster energy security and help transition away from fossil fuels	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). 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.
#5: Energy-efficiency offsets promote energy decentralization	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.
#6: Energy-efficiency offsets are relatively cost-effective	Energy-efficiency offsets from leading providers (e.g., Carbonfund, Ecologi, myclimate) cost less than $40 per ton of CO2 offset. Compare this to direct carbon capture offsets which can cost anywhere from $100-$1,200 per ton of CO2.
#7: Energy-efficiency offsets allow us to reduce carbon emissions in ways we wouldn’t be able to accomplish individually	Energy-efficiency carbon offsets allow us to reduce emissions from activities where sustainable alternatives are not yet widely available.

What Are the 3 Cons of Energy-Efficiency Carbon Offsets

Understanding the drawbacks of energy-efficiency carbon offsets is important in order to effectively mitigate climate change.

3 Cons of Energy-Efficiency Carbon Offsets	Quick Facts
#1: Energy-efficiency offsets can lack additionality	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.
#2: Energy-efficiency offsets can lack standardization and monitoring	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.
#3: Energy-efficiency 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 Can Energy-Efficiency Carbon Offsets Help Mitigate Climate Change

Climate change is a severe and long-term consequence of fossil fuel combustion. Energy-efficiency carbon offsets can help mitigate climate change because they eliminate fossil-fuel-derived carbon from our atmosphere which, if left untreated, 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, 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. 

How Do Energy-Efficiency Carbon Offsets Specifically Help Mitigate Climate Change

Energy-efficiency offsets help eliminate 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. And because higher levels of atmospheric carbon exacerbate global warming, less is better.

What Are Better Alternatives to Energy-Efficiency Carbon Offsets

If used correctly, energy-efficiency 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. Energy-efficiency offsets must be used in conjunction with direct carbon reduction measures so that we are directly reducing emissions as well as avoiding them.

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 energy-efficiency 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 energy-efficiency offsets. 

Final Thoughts

Energy-efficiency carbon offsets are effective at mitigating climate change because they help reduce deforestation and strengthen our natural carbon sinks, and bolster energy security to help transition away from fossil fuels. However, they can also lack additionality, and they do not reduce your own carbon emissions, which can lead to greenwashing.

Energy-efficiency carbon offsets are efficient at reducing CO₂ emissions because they avoid carbon emissions immediately, promote energy decentralization, and are relatively cost-effective. However, they can also lack standardization and monitoring.

Carbon offsets can instigate meaningful change, but they should not be seen as the only solution to climate change. They are effective at reducing CO₂ in the short term, but in the long term, they fail to reduce CO₂ enough. We should directly reduce our own carbon footprint as much as possible first, and only then choose the most effective energy-efficiency carbon offsets.

Stay impactful,

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