Carbon offsets could play a crucial role in mitigating long-term climate change because they fund projects that reduce GHG emissions in areas where sustainable alternatives are not yet available. So, we had to ask: What are carbon offsets really, and could they help us mitigate climate change?

Carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. They include technology-based solutions like direct carbon/air capture, carbon mineralization, and energy efficiency; and nature-based solutions like reforestation, REDD+, and blue carbon.

Keep reading to find out all about what carbon offsets are, how they work, what their project life-cycle is, how effective they are, their pros and cons, and how they can help mitigate climate change.

The Big Picture of Carbon Offsets

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

What Are Carbon Offsets

Carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. They are measured in tons of CO₂ equivalents and are bought and sold through international brokers, online retailers, and trading platforms.

How Are Carbon Offsets Defined

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

“Carbon footprint: the amount of greenhouse gasses 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

Basically, a carbon footprint is the amount of carbon emitted by an activity or an organization. This includes GHG emissions from fuel that we burn directly (e.g., heating a home, driving a car) and GHG emissions from manufacturing the products that we use (e.g., power plants, factories, and landfills). 

One way to reduce our carbon footprint is via the use of carbon offsets. These are reductions in GHG emissions that are measured in tons of CO₂ equivalents and are bought and sold through international brokers, online retailers, and trading platforms. 

“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 play an important role in mitigating the effects of global climate change by reducing greenhouse gas (GHG) emissions beyond what we each can achieve through individual actions.

How Do Carbon Offsets Work

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

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

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

How and When Do Carbon Offsets Reduce Your Carbon Footprint

Carbon offsets can be classified either as measures that remove carbon directly from the atmosphere or those that prevent the release of future carbon emissions into the atmosphere. Both are ways to mitigate climate change caused by anthropogenic CO₂ emissions.

How Do Carbon Offsets Reduce Your Carbon Footprint

Carbon offset projects reduce emissions by eliminating or avoiding carbon emissions via direct carbon/air (DCC/DAC), carbon mineralization, reforestation, afforestation, REDD+, blue carbon, energy efficiency, waste management, or agricultural practices.

Eliminating or avoiding carbon is one way to mitigate climate change which is caused in part due to excess CO₂ emissions in our atmosphere.

When Do Carbon Offsets Reduce Your Carbon Footprint

Depending on the specific type of offset, carbon offsets can either reduce emissions quickly or slowly over time.

• CO₂ emissions reductions from DCC/DAC offsets occur as soon as the machines become operational. Once the carbon capture machines start sucking in atmospheric air, CO₂ removal begins. 

• Carbfix achieves 95% permanent carbon mineralization in under two years. Carbon mineralization mechanisms skip the slow weathering process by breaking down silicate rocks into tiny pieces, increasing surface area, and speeding up CO₂ absorption.

• Reforestation and afforestation projects experience delays in carbon reduction because finding suitable land and physically planting the trees to create a new forest takes time. All trees mature at different rates, but a typical hardwood tree takes around 20 years to reach maturity.

• REDD+ projects reduce carbon emissions immediately because you are protecting existing vegetation rather than creating new vegetation. 

• For blue carbon, carbon emission reductions are delayed when you plant new mangrove trees because you have to wait for the trees to reach maturity; however, protecting existing seagrass beds and tidal marsh areas reduces CO₂ immediately.

• Energy-efficient mechanisms begin reducing CO₂ emissions immediately upon installation or implementation because they use less energy to perform tasks.

• Waste management carbon offsets either avoid emissions immediately by either capturing emissions from waste and turning it into renewable energy or reducing the total amount of waste. 

• In terms of agriculture, methane (CH₄) capture, biochar, and avoided grassland conversion immediately avoids CO₂ emissions, whereas agroforestry practices have a delay in CO₂ emission reductions.

What Are the Biggest Carbon Offsetting Limitations

Because GHGs are found everywhere in our atmosphere, cutting GHGs at any location on Earth provides emission reduction benefits. However, while beneficial, carbon offsets are not without their limitations. 

These limitations make the current voluntary carbon market (VCM) fragmented and complex, which leads to confusion, inconsistencies, and general distrust of the system.

What Is the Project Life-Cycle of Carbon Offsets

To fully understand carbon offsets, we must assess each stage of its life cycle. This life-cycle assessment (LCA) is a method to evaluate the environmental impacts of products and materials. Over the years, companies have strategically used LCA to research and create more sustainable products. So, we had a look at the LCA for carbon offsets! 

Building of Carbon Offsets

The building of carbon offsets varies depending on the type of carbon offset:

• Direct Carbon/Air Capture (DCC/DAC): Siting a DCC plant requires land, water, access to a renewable energy source, and a place to store the captured carbon.

• Carbon Mineralization: The building of carbon mineralization offsets includes building mineralization power plants, identifying lands for injection or above-ground exposure, and actually injecting CO₂ or spreading crushed rocks.

• Reforestation: The building of reforestation carbon offsets includes identifying lands in need of reforestation and physically planting the trees.

• Afforestation: The building of afforestation carbon offsets includes identifying lands to be afforested and physically planting the trees.

• Blue Carbon: The building of blue carbon offsets includes identifying areas in need of marine reforestation.

• Energy Efficiency: Many components are required to construct energy-efficiency mechanisms, and building these components requires machinery that emits CO₂. 

• Waste management: Building the components in a biogas plant requires machinery that emits CO₂. Recycling, food rescue, and composting projects also require facilities, but they require less sophisticated machinery. 

• Agriculture: The building of agricultural carbon offsets includes building biomass power plants and CH₄ capture mechanisms, identifying farms in need of reforestation and grasslands in need of protection. 

Operating and Maintaining of Carbon Offsets

Each carbon offset type has various operation and maintenance needs:

• DCC/DAC: DCC works by sucking atmospheric air into specialized machines which remove the CO₂ so that it can be stored permanently (e.g., pumped deep underground and stored in geological formations).

• Carbon Mineralization: There are very few CO₂ emissions or waste products associated with operating and maintaining carbon mineralization projects, making the carbon footprint of this phase low.

• Reforestation: The operating and maintaining of reforestation carbon offsets includes any measures taken after planting trees to keep the reforested lands alive and thriving. 

• Afforestation: The operating and maintenance of afforestation carbon offsets includes any measures taken after planting trees to keep the planted lands alive and thriving. 

• Blue Carbon: The operating and maintenance of blue carbon offsets includes any measures taken after planting mangrove trees to keep the reforested lands alive and thriving. 

• Energy Efficiency: CO₂ emissions at this stage are associated with the operation of the technology (e.g., water filters, cookstoves, and cogeneration facilities) at the project sites.

• Waste management: There are very few emissions or waste products associated with operating and maintaining waste management projects, making the carbon footprint of this phase low. 

• Agriculture: The operating and maintenance of agricultural carbon offsets include the combustion of biomass, capture of CH₄, and absorption of CO₂ via agroforestry.

End-of-Life of Carbon Offsets

The end-of-life of carbon offsets also depends on the type of offset:

• DCC/DAC: DCC technology is relatively new, so data for this stage is not available yet. DCC power plants have an estimated average life expectancy of 20 years, if properly maintained. 

• Carbon Mineralization: The end-of-life of carbon mineralization offset projects is not yet well documented because mineralization itself is a relatively new technology. But we do know that rates of carbon re-emission are very low given that mineralization is a permanent process.

• Reforestation: The end-of-life of reforestation carbon offsets would include anything that puts the reforested lands at risk of being destroyed, which hopefully would never occur.

• Afforestation: The end-of-life of afforestation carbon offsets would include anything that puts the planted lands at risk of being destroyed, which hopefully would never occur.

• Blue Carbon: The end-of-life of blue carbon offsets would include anything that puts these ecosystems at risk of being deforested or degraded, which hopefully would never occur.

• Energy Efficiency: The life expectancy of energy-efficiency solutions varies depending on the specific solution. Therefore, water filtration systems, cookstoves, and waste cogeneration facilities would all have different lifespans. If properly maintained, these technologies are built to last.

• Waste management: Landfills themselves have an average life expectancy of anywhere from 30-50 years, biogas power plants have a historical life expectancy of 20-30 years, and recycling, food rescue, and composting projects have long life expectancies.

• Agriculture: The end-of-life of agricultural carbon offset projects would include the end-of-life of pyrolysis technology, biomass power plants, or anything that puts agroforestry or grasslands at risk of being destroyed, which hopefully would never occur.

Carbfix + Climeworks: An Example Project of Technological Carbon Removal Offsets

Since 2017, Carbfix has been working with Climeworks, a direct air capture company based in Zurich, Switzerland. After Climeworks’ specialized machines directly capture CO₂ from the air, Carbfix then turns the captured CO₂ into stone in less than two years. 

Carbfix first dissolves the captured CO₂ in water to create a slurry, before injecting it underground where it reacts with basalts and other reactive rock formations to form solid minerals (carbonates) via natural processes. These carbonates remain stable for thousands of years, making the process permanent. To date, Carbfix has injected over 90,000 tons of CO₂ at their Icelandic site.

AFR100: An Example Project of Natural Carbon Removal

Africa contains 17% of our planet’s forest cover yet is subjected to deforestation at 4 times the global average rate. The rainforest of the Congo Basin, the second-largest tropical forest in the world, spans 6 African countries and encompasses 500 million acres.

The African Forest Landscape Restoration Initiative (AFR100) is a country-led effort to bring 100 million hectares of land in the African Congo Basin into restoration by 2030. The 33 countries involved aim to restore agricultural lands, forests, mangroves, wetlands, and grasslands which would add nutrients to the soil, increase biodiversity, create jobs, and improve food security. 

One Tree Planted offers AFR100 carbon offsets through its website at a cost of $20 per 1,000kg of CO₂. They plant various indigenous tree species (e.g., shea and mahogany) as well as mango, avocado, guava, and Brazil nut trees in the Congo Basin region.

How Effective and Efficient Are Carbon Offsets

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

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

Carbon offsets are effective at mitigating climate change because:

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

However, carbon offsets can also lack effectiveness because: 

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

Carbon offsets are efficient at reducing CO₂ emissions because they:

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

However, carbon offsets can also lack efficiency because: 

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

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

How Could you Offset Your Own Carbon Footprint With Carbon Offsets

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

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

What Are The 8 Pros and 8 Cons of Carbon Offsets

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

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

What Are the 8 Pros of Carbon Offsets

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

What Are the 8 Cons of Carbon Offsets

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

How Can Carbon Offsets Help Mitigate Climate Change

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

How is Climate Change Defined

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

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

Oxford Dictionary

Atmospheric CO₂ fuels climate change, which results in global warming. When CO₂ and other air pollutants absorb sunlight and solar radiation in the atmosphere, 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 a part of projects that are carried out until the end of their lifespan have the best chance of reducing carbon emissions and therefore reducing climate change. 

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

How Do Carbon Offsets Specifically Help Mitigate Climate Change

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

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

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

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

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

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

What Are Better Alternatives to Carbon Offsets

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

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

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

Reduce your household carbon footprint:

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

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

Reduce your travel carbon footprint:

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

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

Reduce your lifestyle carbon footprint:

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

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

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

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

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

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

Final Thoughts

Carbon offsets are reductions in GHG emissions that are used to compensate for emissions occurring elsewhere. Each type of carbon offset project has its pros and cons involving additionality, rapidity, longevity of emission reduction, and costs.

Technology-based carbon offsets are a specific type of carbon offset that focuses on the elimination of atmospheric CO₂ and CH₄. Emissions reduction occurs as the emissions are eliminated via DCC/DAC, carbon mineralization, energy efficiency, waste management, or agricultural practices. 

Nature-based carbon offsets are a specific type of carbon offset that focuses on the storage of atmospheric carbon in plants, soils, and the ocean, commonly referred to as our carbon sinks. Emissions reduction occurs as emissions are eliminated via reforestation, afforestation, REDD+, blue carbon, or agricultural practices. 

Although carbon offsets can instigate meaningful change, 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. These offsets also do not reduce your own carbon emissions, which can lead to greenwashing.

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 offsets.

Stay impactful,

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