A carbon offset is a credit that a person or organization can buy to decrease its carbon footprint. When the number of carbon offset credits obtained is equal to an individual or organization's carbon footprint, that person or organization is carbon-neutral. Revenue generated from the purchase of carbon offsets is often -- but not always -- invested in environmentally friendly projects, like investments in green computing technologies.
More generally, carbon offsetting is any reduction of greenhouse gas (GHG) emissions to make up for emissions that occur elsewhere. Carbon offset credits show that an organization or person has reduced its emissions. The term carbon offset is used to describe both the credit and the act of carbon offsetting.
A carbon offset credit represents an emission reduction of 1 metric ton of carbon dioxide. The goal of carbon offsetting is to reduce all or a portion of a carbon footprint.
A carbon footprint is the total amount of carbon dioxide and other GHGs the activities of a person or organization generates. It includes both direct and indirect emissions.
A direct emission originates from a source the reporting entity owns. An example is carbon dioxide produced from fossil fuel combustion inside a delivery vehicle a company owns. Indirect emissions result from the reporting entity's activities but originate from sources the reporting entity does not own. These are also referred to as upstream or downstream activities.
Producing a T-shirt creates indirect emissions at various points in the supply chain. These include growing the cotton and shipping raw materials and the final product, as well as later decomposition of the material in a landfill. These indirect emissions contribute to both the producer's and the consumer's carbon footprints.
The Environmental Protection Agency (EPA) and other websites provide free carbon footprint calculators. Individuals can use these calculators to calculate their carbon footprint.
Organizations and individuals pursue carbon offsetting voluntarily or to comply with regulations.
An individual or company can pay a broker to remove a portion of carbon from the atmosphere, often in another part of the world. The customer calculates their emissions level, and the broker then charges a fee based on that level. The broker will then invest a portion of that money in a project that reduces carbon emissions.
For example, an individual may take a flight that will release a certain amount of GHG into the atmosphere. The person uses a tool to calculate the emissions released on that flight and then buys a carbon credit from a broker to offset that amount of emissions. The broker subtracts its fee and uses the rest of the money to invest in an emissions project, such as a reforestation effort.
Carbon credits cost $3-$5 per ton of carbon emissions today. The price is expected to rise dramatically in the next decade.
The individual or organization receives a certificate or some other proof that they've purchased a carbon offset. They can then use this as proof they've demonstrated compliance.
Another example involves GHG emissions. An organization may monitor GHG emissions generated from cloud usage with a tracking tool and then purchase a carbon offset to comply with decarbonization standards.
An example of a regulation promoting offsetting is the British Standards Institution's Publicly Available Specifications 2060. It details how to demonstrate carbon neutrality and develop a carbon management plan.
An organization can take the following three steps to offset its carbon emissions:
Organizations should choose a certified offset project that generates credits that meet these criteria. In addition, they should choose projects that meet their own environmental and social criteria, such as supporting biodiversity.
Once purchased, organizations should be transparent with stakeholders about their offsetting strategy and the projects they are supporting. Transparency is important to avoid greenwashing accusations. Greenwashing is marketing spin used to convince people that an organization's products, goals and policies are environmentally friendly.
Offsetting has some value in stopping climate change, but it is only one of many climate solutions necessary to save the climate. In offsetting, the carbon emission still takes place, but someone else offsets it. Reducing, eliminating and reversing GHG emissions is a more effective approach to reducing emissions.
Offsets do not encourage polluters to stop producing GHGs; they encourage them to fund other entities to do so. Still, offsets do encourage improved carbon policies and implementation of them where there previously was none.
Carbon offsets will not solve climate change unless leading carbon emissions producers commit to carbon neutrality. This requires developing a sustainable supply chain and a commitment to using renewable and clean energy sources.
Some examples of carbon offsetting projects are the following:
Find out how AI and machine learning can have a mixed impact on climate change prevention efforts.
02 Dec 2021