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. In the scope of carbon offsets, carbon reduction could play a crucial role in meeting this goal. So, we had to ask: What are carbon reduction offsets really, and could they help us mitigate climate change?

Carbon reduction offsets are a specific type of carbon offset whereby they help individuals or organizations reduce emissions. Examples include energy efficiency, Reducing Emissions from Deforestation and Forest Degradation (REDD+), or blue carbon offset projects.

Keep reading to find out all about what carbon reduction 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 Reduction Offsets

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. Carbon reduction offsets are a specific type of carbon offset whereby individuals or organizations reduce emissions through efficiencies. 

What Are Carbon Reduction 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.

Carbon reduction offsets are a specific type of carbon offset whereby individuals or organizations reduce emissions through efficiencies. They include Reducing Emissions from Deforestation and Forest Degradation (REDD+), energy efficiency, and some blue carbon offsets. 

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

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 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. 

How Are Carbon Reduction Offsets Defined

Carbon reductions refer to the decrease of carbon emissions as a result of activity between two points in time. Typically, an individual or organization reduces greenhouse gas (GHG) emissions via efficiencies. 

“Emission reduction: The act or process of limiting or restricting the discharge of pollutants or contaminants, such as by setting emission limits or by modifying the emission source.”

United Nations Environment Programme

Carbon offsets that can be classified as carbon reductions include:

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

How Do Carbon Reduction Offsets Work

Purchasing carbon reduction offsets funds carbon projects that help prevent CO₂ from entering the atmosphere. It is a proactive, rather than a reactive, way of dealing with carbon emissions. 

How and When Do Carbon Reduction Offsets Reduce Your Carbon Footprint

Carbon reduction refers to preventing carbon from entering our atmosphere via the protection of existing terrestrial/marine reservoirs and switching to energy-efficient mechanisms. It is one way to prevent the adverse effects of CO₂ emissions that occur once they enter our atmosphere.

In the context of carbon credits, carbon emission reductions are quantified relative to a baseline scenario, or the business-as-usual carbon emissions.

How Do Carbon Reduction Offsets Reduce Your Carbon Footprint

Purchasing carbon reduction offsets funds carbon emission reduction projects that prevent CO₂ from entering the atmosphere in the future. 

For example, carbon reduction projects such as REDD+ can help protect existing carbon sinks (e.g., via avoided deforestation). And projects such as clean cookstoves can prevent CO₂ emissions from entering our atmosphere. These types of projects can buy us time to implement more permanent measures such as direct carbon capture. 

When Do Carbon Reduction Offsets Reduce Your Carbon Footprint

The timing of carbon reduction varies depending on the type of carbon reduction:

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

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

• For blue carbon, protecting existing seagrass beds and tidal marsh areas reduces CO₂ immediately.

What Could Prevent Carbon Reduction Offsets From Being Realized

Carbon reduction offsets can lack additionality, permanence, standardization, and monitoring. In addition, identifying the baseline for REDD+ projects can be inaccurate.

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. And energy-efficiency projects are also often not additional because many projects receiving revenue now would have been built regardless. 

To be effective, REDD+, energy efficiency, and blue carbon offset projects must also 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. 

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.

• 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.

What Is the Project Life-Cycle of Carbon Reduction Offsets

To fully understand carbon reduction 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 reduction offsets! 

Building of Carbon Reduction Offsets

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

• REDD+: Evaluating the state of the existing forests in order to calculate their baseline carbon emissions. 

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

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

Operating and Maintaining of Carbon Reduction Offsets

Each carbon reduction type has various operation and maintenance needs:

• REDD+: Protecting forests during the REDD+ project’s lifetime via defining the causes of deforestation, the baseline emissions, and the reference emissions levels for a particular area. Then REDD+ establishes both social and environmental safeguards to combat deforestation.

• Energy efficiency: There are very few CO₂ emissions or waste products associated with operating and maintaining energy-efficiency projects, making the carbon footprint of this phase low. 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.

• Blue Carbon: The operating and maintenance of blue carbon offsets includes protecting existing seagrass beds and tidal marshes. 

End-of-Life of Carbon Reduction Offsets

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

• REDD+: Forests not protected – or not anymore protected – by REDD+ projects can be subject to deforestation activities. 

• 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.

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

Tubeho Neza (“Live Well”): An Example Project of Carbon Reduction Offsets

The Tubeho Neza (“Live Well”) project is a Rwandan clean cookstoves project. It was launched by DelAgua in 2013, in partnership with the Government of Rwanda, to transform the lives and environment of rural African communities. It is one of the largest programs of its kind which has helped avoid CO₂ emissions and pull families out of poverty.

To date, the project has provided over 6 million Rwandans with 1.3 million stoves, free of charge. The stoves use small twigs and branches, which people can collect without cutting down trees, using 71% less wood than a traditional fire and thereby reducing deforestation.

The Rwandan cookstoves project is certified by the Verified Carbon Standard and also adheres to multiple UN Sustainable Development Goals. You can visit DelAgua’s website and contact a representative to purchase your carbon offsets.

How Effective and Efficient Are Carbon Reduction Offsets

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

In terms of efficiency, carbon reduction offsets chiefly preserve existing terrestrial and marine ecosystems, promote energy decentralization, and are relatively cost-effective. However, they may only reduce CO₂ emissions during their project life span, have a high rate of carbon re-emission, and lack standardization and monitoring.

Carbon reduction offsets are effective at mitigating climate change because:

• Carbon reduction offsets involving REDD+, energy-efficiency, and blue carbon combat deforestation and reinforce our terrestrial and marine carbon sinks.
• Carbon reduction offsets involving energy efficiency can help reduce reliance on biomass and fossil fuels, leading to increased energy security and energy independence.

However, carbon reduction offsets can also lack effectiveness because

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

Carbon reduction offsets are efficient at reducing CO₂ emissions because:

• Carbon reduction offsets involving energy efficiency promote energy decentralization.
• REDD+ offsets preserve existing terrestrial and marine ecosystems.
• Carbon reduction offsets involving REDD+, energy efficiency, and blue carbon are some of the most cost-effective methods of carbon emission reduction.

However, carbon reduction offsets can also lack efficiency because:

• REDD+ offsets avoid emissions only during project lifespans.
• Carbon reduction offsets involving energy efficiency and blue carbon can lack standardization and monitoring due to a variety of factors.

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. 

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 are a specific type of carbon offset whereby individuals or organizations reduce emissions through efficiencies. CO₂ reduction occurs as a result of protecting existing biomass stocks (REDD+, blue carbon) or by switching to energy-efficient practices. Each type of reduction has its pros and cons involving permanence, additionality, rapidity and longevity of emission reduction, and costs.

Although carbon reduction 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. Carbon reduction 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 reduction offsets.

Stay impactful,

Sources

• United Nations Convention Framework on Climate Change: The Paris Agreement
• myclimate: What does “net zero emissions” mean?
• Britannica: Carbon Offset
• ClimateSeed: The difference between carbon removal and carbon avoidance
• Impactful Ninja: What Are REDD+ Carbon Offsets and How Do They Work
• Impactful Ninja: What Are Energy Efficiency Carbon Offsets and How Do They Work
• Impactful Ninja: What Are Blue Carbon Offsets and How Do They Work
• U.S. Environmental Protection Agency: Offsets and RECs -What’s the Difference?
• Britannica: Carbon Offset
• Impactful Ninja: Why Is a Carbon Footprint Bad for the Environment? All You Need to Know
• United States Environmental Protection Agency System of Registries: Climate Change Terms – Carbon Footprint
• David Suzuki Foundation: Are carbon offsets the answer to climate-altering flights?
• SaveMoneyCutCarbon: Carbon reduction vs. carbon offset – what’s the difference?
• Watershed: Carbon removal and avoidance: a buyer’s guide
• Impactful Ninja: What Are Direct Carbon/Air Capture Offsets and How Do They Work?
• Vox: RECs, which put the “green” in green electricity, explained
• Carbon Offset Guide: Permanence
• The Institute for Carbon Removal Law and Policy: Nature-Based Solutions
• United States Environmental Protection Agency: Distributed Generation of Electricity and its Environmental Impacts
• Science Direct: Life-cycle assessment (LCA)
• MIT SMR: Strategic Sustainability Uses of Life-Cycle Analysis
• International Institute for Environment and Development: REDD: Protecting climate
• International Renewable Energy Agency: Solar Energy
• The Blue Carbon Initiative: Homepage
• Forest Carbon Partnership: Topics
• One Tree Planted: How Planting Trees Offsets Carbon
• The United Nations Educational, Scientific and Cultural Organization: Blue Carbon
• DelAgua: Project Rwanda
• DelAgua: Homepage
• Verra: Homepage
• United Nations Department of Economic and Social Affairs: The 17 Goals
• DelAgua: Carbon Credits
• Client Earth: What is a Carbon Sink?
• International Energy Administration: Energy Security
• US Environmental Protection Agency: Summary of the Energy Independence and Security Act of 2007
• Impactful Ninja: How Effective and Efficient Are Carbon Reduction Offsets? Here Are the Facts
• Ecosystem Marketplace: Voluntary Carbon Markets Top $1 Billion in 2021 with Newly Reported Trades
• Carbon Offset Guide: Voluntary Offset Programs
• Impactful Ninja: Best Carbon Reduction Offsets
• Carbonfund: Homepage
• REDD.plus: Homepage
• Sustainable Travel International: Homepage
• DelAgua: Homepage
• Wildlife Works: Homepage
• South Pole: Homepage
• InfinteEARTH: Homepage
• Ecologi: Homepage
• Biofilica: Homepage
• Myclimate: Homepage
• Impactful Ninja: Carbon Reduction Offsets: All 6 Pros and 5 Cons Explained
• Edie: Carbon offsetting – How are businesses avoiding greenwashing on the road to net-zero?
• World Nuclear Association: Carbon Emissions from Electricity
• Natural Resources Defense Council: Global Warming 101
• National Oceanic and Atmospheric Administration: Climate Change – Atmospheric Carbon Dioxide
• Terrapass: Carbon Offset Projects
• The Ocean Foundation: Reduce Your Carbon Footprint
• Energy Information Administration: Renewable Energy Explained
• Energy Star: Compact Fluorescent Light Bulbs (CFLs) and Mercury
• Our World in Data: Where in the world do people have the highest CO₂ emissions from flying?
• Zero Waste Europe: Reusable vs Single Use Packaging
• Carbonbrief: Interactive – What is the climate impact of eating meat and dairy?
• Stop Waste: Recycling and Climate Protection
• Impactful Ninja: Is Taking Long Showers Bad for the Environment?
• United States Environmental Protection Agency: Showerheads
• Impactful Ninja: 4 Main Reasons Why Reducing Your Carbon Footprint is Important