Everyone is talking about carbon emissions and greenhouse gases these days. One of the ways companies talk about their emissions is through carbon offsetting. Carbon offsets are increasingly popular method for “reducing” your carbon footprint. So what are they? That’s what this article is going to discuss. I’m going to talk about what exactly carbon offsetting is, what it means, what a carbon credit is, and more in this beginner’s guide to carbon offsetting.
I have a feeling that companies are going to talk about carbon offsetting more and more as the climate crisis gets worse. So understanding what carbon offsets are and how they work will help you navigate the marketing gymnastics corporations perform in an effort to appear eco-friendly.
What is carbon offsetting?
Simply put, carbon offsetting is paying to eliminate or avoid carbon emissions somewhere else in order to balance out the carbon you emit. Another way to put it would be: carbon offsetting means a person, company, or other entity invests in a service or product that reduces greenhouse gases in the earth’s atmosphere.
You can imagine carbon offsetting as tipping the scales back to a more balanced position. A company produces X amount of carbon which tips the imaginary scale toward “bad.” That company then funds a project that plants trees by buying carbon offsets. Those trees absorb carbon in our atmosphere, which tips the scales away from bad and toward a more balanced position.
Example of Carbon Offsetting
Another common practice is for people to buy carbon offsets for a flight. This is something you could easily do. Let’s say you fly from New York to California. You would be responsible for about 2 metric tons of carbon emissions from that flight. You could pay $20 (roughly $10 per metric ton) to offset your carbon emissions from that flight. From a carbon standpoint, it’s as if you never even took that flight. Your carbon emissions from that flight for will be taken out of the atmosphere as a result of your carbon offset purchase, essentially canceling out the carbon you produced.
Different Kinds of Carbon Offsetting
There are many different companies that sell carbon offsets (I’ll cover some of those later on). Each company is going to have it’s own project(s), it’s own calculating methods, and so on. But amidst all the variety of offsets and choices you can make, you’ll likely see carbon offsetting projects doing 1 of 2 things. Those 2 things are:
- Removing carbon from the atmosphere
- Avoiding carbon altogether
Carbon Offsets That Remove Carbon
Planting trees is an example of removing carbon. Trees act to sequester carbon in our atmosphere. Sequest is science talk that means the carbon is stored. When carbon is sequestered it can be for any length of time and even in different forms. Some of that sequestered carbon makes its way into the soil, some is stored in the tree, and so on.
Carbon Offsets That Avoid Carbon
An example carbon offsets that avoid carbon emissions would be a project that funds wind farms. That wind farm project works to reduce an area’s reliance on fossil fuels for energy. Carbon that would have been emitted from burning those fuels never gets released because the region’s energy is then coming from air.
Renewable energy projects will almost always be considered carbon avoidance projects. Renewable energy includes things like wind energy, solar power, and hydro energy. These kinds of projects can be really good at helping curb carbon emissions long term.
What Are Carbon Credits?
Let’s look at one last thing called carbon credits before getting into whether or not carbon offsetting actually works. Carbon credits are sometimes used interchangeably with carbon offsets but they’re not exactly the same thing.
A carbon credit is a permit to produce a specific amount of greenhouse gases or carbon.
Example of How Carbon Credits Work
Let’s say you are a company. And you have a limit of 100 units of carbon emissions for the year of 2022. Now let’s say you only produce 90 units of carbon for the year, you have 10 units left that you are permitted to emit. Rather than just letting it go, companies have commodified carbon limits and found a way to sell carbon credits as a formal, and often, legal permission to emit carbon.
So, you have 10 leftover carbon units for the year. That’s great for you. But your friend is 10 credits over his limit. He’s going to get fined for emitting too much carbon. But wait, you’re 10 units under…he’s 10 over, there’s clearly a deal to be worked out! If he’s going to get fined 10 dollars per unit of carbon, that amounts to $100 dollars total for being over his limit. What if you sell him your leftover carbon emissions for a small $5 per unit. You make $50 and he saves $50. It’s a win-win right?
That’s basically how carbon credits work, but they’re much more complex in real life. The carbon credit market is a billion dollar market riddled with legal regulations and policies. Similarly, the carbon offsetting market is also a billion dollar market, but carbon offsets and carbon credits are not the same thing.
Does carbon offsetting work?
It’s not as easy as yes or no. That answer is, it depends, like most things in sustainability. Carbon offsetting has great potential, and 10 years ago the market for carbon offsets looked completely different and much smaller than it does today. But, like anything with big corporations, there are people trying to avoid their responsibilities for the sake of a profit or people trying to prevent the carbon offsetting industry from working like it should. So let’s talk about carbon offsets and whether they work in two ways. First let’s look at whether carbon offsets work on a personal scale, and then whether or not they work on a corporate scale.
Carbon Offsetting for You
Just like if you’re buying an eco-friendly product or a sustainable swap, who you’re buying from is a big deal. Purchasing carbon offsets from a reputable and trustworthy source will mean that your carbon offset is much more likely to actually do what you want it to do, which is to cancel out your carbon emissions.
When you’re just buying carbon offsets for you or a small group of people, you get to choose who to trust with your money, what projects to fund, etc. If you want to offset your carbon footprint or certain activities in your life, then I would highly recommend purchasing carbon offsets. See some of the best programs below for more details.
Carbon Offsetting for Businesses
Carbon offsetting for businesses is much trickier than purchasing offsets for 1 or 2 people in a home. When it comes to the business world, we’re talking about billions and billions of dollars going towards offsets, brand image, and marketing. So let’s talk about some pros and then some cons of carbon offsetting at a corporate level.
Pros
Carbon offsetting gives companies flexibility to reduce their footprint in ways that might not make sense or work for their own business. For example, airline companies can’t exactly cut back on fuel consumption just yet. So offering alternatives like planting trees or funding solar farms is an opportunity for them to reduce their impact in a realistic way.
Carbon offsetting also provides funding to projects that might otherwise struggle to source the money. And because that funding is coming from a company, companies are incentivized to reduce their footprint. It kind of works like a tax on carbon, but voluntarily. Your company is publicly committed to reaching a certain goal for emissions and right now you’ve reached that goal through offsets. But, those offsets cost money, so eventually if you can reduce it without offsets then you’re operating cleaner and you don’t have to spend the big bucks on offsets for someone else to balance out your carbon emissions.
Cons
The list of cons for carbon offsetting in business seems to never end. The main theme I see in almost all of the cons is lack of trust and transparency. Corporations will always look out for their bottom line, profits, shareholders, and other stakeholders over the general public and the good of the planet. That means many companies will exploit loopholes in policy and exaggerate their green image.
A common claim against carbon offsets is that we can’t buy our way out of the climate crisis. I agree. But I do think that carbon offsets offer a flexible and realistic solution for many companies and many people. Carbon offsetting doesn’t have to be a permanent solution in order to be good.
Another con for carbon offsetting is that it implicitly gives permission to produce more emissions. An example for a personal level would be, you offset 1 flight you took for vacation so you rationalize taking 2 more this year when you would normally only fly once a year. Even though you’re offsetting your emissions, you’re still emitting more greenhouse gases which is not the direction anyone should be moving in. The same idea applies to corporations.
How much does carbon offsetting cost?
Carbon offsetting on a personal scale is very flexible. You get to choose when, how, and how much you offset. You could easily calculate your carbon footprint for an entire year and offset your whole year. Or, you could offset a single round-trip flight.
To calculate your carbon footprint, you’ll want to visit a carbon footprint calculator.
Carbon Footprint Calculators
Carbon Offset Programs
There are a ton of carbon offsetting programs you can pay to offset your carbon emissions, here are some of the most popular programs I’ve found.
TerraPass
TerraPass has flexible carbon offset options. They even have options to offset flights, events, and travel in case you’re not looking for annual or monthly offsets. They also have their own carbon footprint calculator available.
Native
Native offers flexibility by giving you plenty of options to choose from when buying offsets. You can choose how many tonnes of carbon you want to emit and how often.
Clear
Clear itemizes the different things you can carbon offset in your life. This could either give you the flexibility to offset just a few things or complicate the process. It depends on what you want to offset. Their calculator is built right into the offset purchasing process.
Thanks for joining me today! If you liked this content and want to see more, please subscribe to my newsletter. You can do that here!
If you’re interested in learning about carbon neutrality then check out this post!
Sustainably is supported by readers like you. When you buy through links on this site, we may earn an affiliate commission at no additional cost to you. You can read more about affiliate links on our “Affiliate Marketing…” page.