How Effective Is Carbon Offsetting Really? Here Are the Facts

How Effective Is Carbon Offsetting Really? Here Are the Facts

Grace Smoot

Read Time:13 Minutes


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The current global climate crisis threatens our planet’s environmental, economic, and social health. And carbon offsets are often shown as one of the ways we can reduce greenhouse gas (GHG) emissions and our carbon footprint to ensure a sustainable planet for future generations. So we had to ask: How effective is carbon offsetting really?

Carbon offsetting is effective if it is additional – it reduces carbon emissions more than would have occurred without it – and permanent. Renewable energy, energy efficiency, carbon sequestration, and aviation offsets are a good start; however, cutting emissions from the source is more effective.

Carbon offsets are a controversial topic. Supporters tout their ability to improve environmental health, while opposers assert that they don’t really work. So who is correct? Keep reading to find out how effective carbon offsetting is, really. And how we can make it even more effective in the future. 

How Do Carbon Offsets Work at Their Core

Carbon offsets play a crucial role in reducing our carbon footprint, the amount of carbon (CO2) emissions associated with an individual or an entity. 

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 reduce GHG emissions from coal, oil, and natural gas. Reducing your consumption of these, in turn, reduces your carbon footprint, which has huge impacts on environmental, economic, and public health.

Carbon footprint: the amount of greenhouse gases and specifically carbon dioxide emitted by something (such as a person’s activities or a product’s manufacture and transport) during a given period”

Merriam Webster

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. They are measured in tons of carbon dioxide (CO2) equivalents and are bought and sold through international brokers, online retailers, and trading platforms. 

Because GHGs are found everywhere in our atmosphere, cutting GHGs at any location on earth provides emission reduction benefits. 

Here’s How Effective the Most Popular Carbon Offset Programs Are

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

  • To be beneficial, these offsets must be additional. That means that these projects must reduce GHG emissions more than would have occurred if there were no projects to begin with.
  • They must also be permanent, in the sense that a tree planted to offset carbon should not be removed. 

In short, the most effective offset programs are renewable energy programs, followed by energy efficiency improvements, carbon sequestration, and aviation offset programs.

Carbon Offsetting Program Effectiveness
Renewable EnergyRenewable energy offset programs are effective because they decrease the use of fossil fuels and promote a movement towards clean energy. 
Energy Efficiency ImprovementsEnergy efficiency offset programs are effective because they both reduce global carbon emissions and improve the lives of those living in the communities where the projects are being implemented.
Carbon SequestrationCarbon sequestration offset programs from forest-related activities are not as effective alone as they do not remove enough carbon to have significant impacts.
Aviation Offset ProgramsAviation carbon offset programs are not as effective because the money is not being used to make air travel cleaner and more sustainable. 

Aviation, renewable energy, energy efficiency, and carbon sequestration are just some areas that provide carbon offset projects. They can range anywhere from a couple of hundred tons of CO2 per program per year to thousands of tons of CO2 per program per year. Below we will see how effective each offset area is. 

How Effective Is Renewable Energy Carbon Offsetting 

In these offset programs, the generation of energy from renewable resources (solar, wind, hydro, geothermal, biomass) rather than from fossil fuels creates a reduction in GHG emissions. Solar and wind farms are some common carbon offset projects. 

  • Drawbacks: Renewable energy has high upfront costs, intermittent energy production, geographic limitations, and lower quantities of energy produced when compared to fossil fuels. Also, most of the available land for renewable energy carbon offset programs is located in poor countries. When powerful countries exploit this land, the native peoples are forced to compete for their basic needs, and they can even face food scarcity and eviction

Renewable energy offset programs are effective at offsetting carbon because they decrease the use of fossil fuels and promote movement towards clean energy. Renewable energy accounted for 11% of total global energy consumption in 2019, and this number is only expected to increase. 

How Effective Is Energy Efficiency Carbon Offsetting

These offset projects are designed to create products or systems that use less energy than conventional systems to perform the same task. Common projects include the widespread installation of LED light bulbs and efficient cooking stoves.

  • Benefits: Energy efficiency offsets are typically the most cost-effective way to reduce carbon emissions, making them a key part in fighting climate change. The projects are typically implemented in developing countries and provide native people with increased energy security, job creation, and environmental mitigation. Installing efficient cooking stoves and water filtration technology also improves quality of life. 
  • Drawbacks: If products are replaced too quickly, the amount of CO2 required to produce the new product would exceed the amount of CO2 saved with the new product. The rate of product replacement should be taken into account to ensure this does not happen. Otherwise, there are no known drawbacks to energy efficiency projects. 

Energy efficiency offset programs are effective because they both reduce global carbon emissions and improve the lives of those living in the communities where the projects are being implemented. 

How Effective Is Carbon Sequestration Offsetting

Carbon sequestration is defined as the long-term storage of carbon in plants, soils, geologic formations, and the ocean. The Kyoto Protocol allows countries to receive credits for carbon-sequestration activities including afforestation, reforestation, improved forestry, improved agricultural practices, and revegetation. 

  • Benefits: Stabilizing carbon in solid and dissolved forms prevents it from accumulating in the atmosphere. For every 1 ton of carbon that is emitted, one ton of carbon is sequestered, resulting in net-zero emissions. Direct capture of carbon is still relatively new, so more research needs to be done on the cost-effectiveness and energy efficiency of the process. 
  • Drawbacks: A newly planted tree could take upwards of 20 years to capture the amount of CO2 that a carbon offset program promises. Although we plant approximately 1.6 billion trees each year, we also cut down about 15 billion trees each year. Also, we would have to plant AND protect a massive number of trees for decades to offset even a fraction of our global CO2 emissions. There is always the risk of droughts, wildfires, tree diseases, and deforestation wiping out newly planted trees, negating any benefits. 

Due to the long life cycle of trees and constant risk of them being destroyed, Carbon sequestration from forest-related activities alone does not remove enough carbon to have significant impacts. Essentially, planting trees can’t replace cutting CO2 emissions.

How Effective Is Aviation Carbon Offsetting

Roughly 40 airlines globally offer voluntary offsetting programs, where passengers pay extra money for a flight to fund projects that will reduce CO2 emissions elsewhere. Terrapass provides the option to purchase carbon offset credits relative to the number of miles you are traveling. 

  • Benefits: 500 pounds of carbon per passenger is emitted for every 1,000 miles flown, so reducing these emissions would have positive impacts on the environment. When you purchase this offset, your money goes to fund renewable energy, energy efficiency, and/or reforestation projects.
  • Drawbacks: Aviation offsets are perhaps the least used and least known of all carbon offsets. Companies may advertise a specific program, but it may be just for public attention. This is why it is important to verify that a program is legitimate and accurately reported and measured. Also, even when you pay to offset your flight, the carbon is still being emitted into the atmosphere. 

Aviation carbon offsets are not as effective because the money is not being used to make air travel greener and more sustainable. Rather, it is used to fund other types of offset projects.

Why You Can’t Effectively Offset Your Whole CO2 Footprint (And Why It’s Still Important to Do So)

In order to offset our carbon footprint we first must determine what our individual carbon footprint is. The United States Environmental Protection Agency (US EPA) provides a calculator so you can determine your carbon footprint in three areas: home energy, transportation, and waste. Everyone’s location, habits, and personal choices are different, so it is important to first know where you fall on the emissions scale before you begin to reduce it. 

Offsetting your carbon footprint is beneficial, but it should not be used as a Panacea for climate change. Offsetting your entire carbon footprint is not only difficult, but it is also impractical because there aren’t enough carbon sinks to offset every ton of CO2 produced from our collective human activities. 

“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

The main carbon sinks are:

  • Forests: They absorb 2.6 billion tons of CO2 every year. The main threat to this sink is deforestation, which occurs at roughly 10 million hectares (~ 25 million acres) per year. 
  • Soil: They absorb approximately 25% of all carbon emissions, with most of it stored as permafrost. Not only that, but Earth’s soil contains 2,500 gigatons of carbon, more than three and four times the amount stored in our atmosphere and in all living plants / animals, respectively. One of the main threats to this sink is the melting of glacier ice due to global warming, which would instead release massive amounts of carbon into our atmosphere. 
  • Oceans: Phytoplankton in our oceans are responsible for absorbing approximately 25% of all carbon emissions, making them one of the world’s largest carbon sinks. But this absorbing ability has come at a cost. Increased absorption of CO2 causes ocean acidification. Over the past 200 years our oceans have experienced a 30% increase in acidity, which harms marine life and has a ripple effect on our economy.

Once those sinks fill up, we won’t be able to offset any more carbon. Also, the more carbon we add to these sinks, the faster we degrade them and render them unusable. This is why although offsetting can buy us time, we still need to zero out our carbon emissions and start removing CO2 from the atmosphere in order to truly mitigate climate change. 

But just because carbon offsetting won’t solve all of our climate change problems doesn’t mean it isn’t important in the fight against climate change. The benefits of carbon offsets go beyond reducing your overall GHG emissions to balance off your personal carbon footprint:

  1. Improves Air Quality: Degradation of air quality as a result of carbon emissions is a serious issue. In 2009, the U.S. government declared CO2, CH4, N2O, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) threats to the public health and welfare of current and future generations. Reducing C02 emissions would lead to improved public health in terms of asthma, respiratory allergies, airway diseases, and lung cancer.  
  1. Protects Ecosystems: Healthy ecosystems have been linked with cleaner air, water, and food. Protecting forest habitats increases carbon sequestration and defends against erosion. Protecting agricultural land ensures a robust, secure, and prosperous food system. Protecting aquatic ecosystems ensures a readily available supply of freshwater. Lastly, protecting biodiversity protects human health because many plants and animals are used in modern medicines
  1. Supports Green Jobs: The renewable energy sector employed 11.5 million people worldwide in 2019, with solar energy making up the bulk of those jobs. Renewable energy jobs continue to increase as we start to realize just how beneficial renewable energy is for our environment. 

Carbon offsets provide various benefits in the fight against climate change, although they cannot be the only method we rely on

How We’ve Failed at Both Reducing and Offsetting Our Collective Footprint

Opposers argue that carbon offsets don’t really work because no matter how much we offset, we are still pumping upwards of 35 billion tons of CO2 into the atmosphere every year. They assert that instead of substituting offsetting carbon emissions, we should instead cut the emissions directly at the source. But have we done this? Have we cut emissions directly at the source? The data says no.  

Who Is Responsible For Climate Change? – Who Needs To Fix It?

The COVID-19 pandemic triggered the largest decrease in energy-related carbon emissions since World War II, a decrease of 2 billion tons. However, emissions rebounded quickly at the end of 2020, with levels in December ending 60 million tons higher than those in December 2019. This indicates that the earth is still warming at an accelerated rate, and not enough is being done to implement clean energy practices. 

Our World in Data: Annual total CO2 emissions

When you buy a carbon offset, you are paying someone else to cut their emissions so you don’t have to cut your own emissions. This is why offsetting alone will not be enough to reduce global carbon emissions. 

How Can CO2 Offsetting Become More Effective

It is without a doubt that the market for carbon offsets has increased dramatically in recent years. The idea that you can simply purchase credits to help the environment is appealing, but this system still has room for improvement.   

If they are both additional and permanent, carbon offsets can help reduce your overall GHG emissions to balance off your personal carbon footprint to fight climate change – at least in the short term. But they can be much more effective if they meet certain criteria and standards.  

Here are key criteria to look for in a carbon offset program:

  • A clearly defined protocol that determines which types of projects are eligible and how emission reductions will be measured
  • Independent third-party verification of compliance with the protocol
  • Registration of offsets in an offset registry, which tracks each credit with a unique serial number to ensure it is only used once 

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

How Can You Choose the Most Effective CO2 Offsetting Program

Carbon offset project standards assure transparency and quality in the creation, quantification, and verification of offset projects. This way you can ensure that the project is actually reducing CO2 emissions. The following are recognized carbon offset standards:

  • Verified Carbon Standard (VCS): Considered the world’s leading voluntary GHG program, with 1700+ projects having removed 630+ million tons of CO2 from the atmosphere. Examples of projects include hydropower in Turkey, forest conservation in Peru, and landfill gas capture in China.

Choosing carbon offset projects from any of the above project standard registries helps ensure that your project is verified and that it actually reduces CO2 emissions.

Final Thoughts

As shown by our steadily increasing levels of carbon dioxide, we have failed to reduce and offset our carbon footprint to date. When implemented properly, offset programs involving aviation, renewable energy, energy efficiency, and carbon sequestration can reduce GHG emissions, which improves air quality, protects ecosystems, and supports green jobs. The most effective offset programs are renewable energy programs, followed by energy efficiency, carbon sequestration, and aviation offset programs.

Carbon offsets are a good place to start if you want to get into the carbon-emission reduction game, but in order to be effective in the long-term, we must not rely on them solely. Cutting emissions from the source and then offsetting the remainder is the best way to reduce our carbon footprint and provide the highest environmental benefits. If we fail to cut emissions first, we will fill up our carbon sinks and render them unusable. Preventing carbon emissions rather than reacting once they are already emitted is the best way to reduce overall emissions.

Stay impactful,

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