What Are Carbon Offsets, and Why Are They Important?

What is a Carbon Offset Illustration

Written by Terrapass


In the global effort to reduce greenhouse gas emissions (GHG emissions) to combat global warming and climate change, there is carbon dioxide (CO2) climate action. While other greenhouse gases, such as methane, are also of concern, reducing CO2 is paramount when it comes to climate action, whether that is aiming for becoming carbon neutral or reaching net-zero emissions.   

Companies such as Terrapass are working hard to provide the necessary mechanisms to allow individuals and companies to offset their carbon emissions in a verifiable, transparent manner. But do these carbon offsets really work? Below we expand on what carbon offsetting entails and how it can be used to reduce CO2 — as well as where the limitations exist.  

What Is a Carbon Offset? 

A carbon offset is essentially sequestering (or capturing) the equivalent amount of greenhouse gases as are emitted from certain actions and activities. This is measured in carbon dioxide equivalents (CO2e), largely because carbon is the main GHG that is captured and offset.   

Carbon offsets can be done for individual activities, such as a single flight, or for a collection of actions, such as the entire carbon footprint of a multinational company. Offsetting is generally done through the use of purchasing carbon credits, which are created when carbon capture projects effectively remove CO2 from the air. Individuals and companies can then purchase these credits to offset their desired actions, making them carbon neutral in the process. It is important to note that once credits are purchased, they must be retired to effectively remove the amount of carbon that is associated with each one. Retirement of credits means that the offsets associated with them can not be counted again, which gets rid of double counting of credits and keeps emissions reductions closer to what they truly represent.  

There are different types of carbon credits in two different markets: the voluntary carbon market, which utilizes voluntary emissions reductions (VERs), and the compliance carbon market, which uses certified emissions reductions (CERs). The compliance market is for cap and trade systems, which typically applies to larger, more carbon-intensive companies and industries. With this market there is a set limit of carbon that is allowed to be emitted, and companies must purchase enough offsets to stay below a government-mandated limit.   

The voluntary market, on the other hand, is for companies that willingly want to offset their carbon emissions to varying degrees. This market has grown exponentially over the past couple of years, buoyed in large part by investor demand to only invest in companies that have strong emissions reductions programs and other favorable ESG (environmental, social, and governance) metrics in place.   

Carbon offsets can be measured in kilograms or metric tons of carbon removed from the atmosphere (sometimes written as “tonnes”).  

Does Carbon Offsetting Really Work? 

Carbon offsetting does work, insofar as carbon emissions from polluting activities in one area leads to atmospheric carbon reduction in another. True offsets capture a verifiable amount of carbon, ensuring that you can purchase the proper amount to negate the amount of emissions that you want to cover.  

However, while it is an effective part of an overall climate action strategy, it is not the only part. Emissions reductions are also needed at the source to go beyond carbon neutrality and reach net-zero emissions.  

What Are Some Carbon Offset Examples? 

Carbon offsets are typically created by planting trees and sequestering carbon within their trunks. Though this is not the only form of offsetting, it is the most common — and at present it is the best way to reliably offset large amounts of CO2.   

While restorative forestry and tree planting projects are the most common and most utilized forms of carbon offsetting, there is more to offsets than just trees. Several methodologies exist for capturing carbon, such as direct capture from CO2 emitted by fossil fuels, capture and storage of CO2 and other GHGs that seep out of landfills, and renewable energy projects (or clean energy projects) that create carbon credits. There is also an emerging type of offsetting that utilizes protection of forests rather than reforestation, keeping them intact along with the carbon stored inside. This is beneficial not only from a carbon sequestration perspective but also because it helps protect biodiversity and helps support local communities that benefit from the forest’s protection for their livelihoods.  

Some specific carbon offset projects include the Iwokrama forest reserve in Guyana and Carbon Footprint’s Malawi Biomass Conservation. When it comes to organizations that legitimize offset programs, Gold Standard and Verra are the biggest. Verra’s Verified Carbon Standard (VCS) program is the most widely used voluntary carbon market in the world, using field audits by qualified independent third parties as well as dedicated Verra staff to ensure proper compliance.   

Additionally, certain programs are better than others for offsetting specific actions, such as Sustainable Travel International for neutralizing carbon emissions from tourism or Atmosfair for air travel. For general offsetting purposes, Terrapass was voted the easiest to use by EcoWatch 

What Does It Mean to Carbon Offset Your Flight? 

Offsetting your flight is essentially purchasing the requisite amount of carbon credits to make up for the carbon emissions associated with your share of a flight — with your share being equal to the amount of overall CO2 emitted during the flight divided by the number of people on the plane (first class and economy are in their own categories). While this does not lead to direct emissions reductions from air travel itself, it is the best way to reduce your carbon footprint associated with flying, at least until bio-jet fuel or some other form of carbon-free energy can be used to propel airplanes.  

How Do You Make Sure Your Carbon Offset Is Good? 

Carbon Offset | Forest Angle Photographsource

If you want to make a difference in how much carbon you are responsible for emitting — and you want to make sure you are not wasting your money — you need to offset your carbon with a trustworthy source. There are many reliable and transparent offset programs, such as Terrapass’ offsetting based on individual carbon offset calculations. It is up to you to find the one that is a right fit. Programs that use the Gold Standard or Verra VCS standards and are third-party verified by reputable auditors are likely good carbon offsets.  

Can You Really Negate Your Carbon Emissions? 

Depending on your lifestyle, where you live, and how conscious you are of your actions, it is possible to negate your carbon emissions. It is virtually impossible to reach carbon neutrality without offsetting your carbon footprint — simply existing in any part of the world will result in you being a part of indirect (and likely direct) emissions. Everything from eating a meal prepared on the street to taking an elevator in a high-rise building has CO2 associated with it. The question really becomes how much carbon is your lifestyle responsible for producing — and, therefore, how much carbon do you need to offset to reach net-zero emissions.   

The less you emit the easier it is to negate your emissions. If you emit a lot, it just means you will need to offset more to cover your footprint.    

How Many Trees Does It Take to Offset Carbon? 

The number of trees it takes to offset carbon differs depending on several factors, such as the type of tree, the environment it is in, the age of the tree, and other variables. Using the average carbon storage capacity of a tree, which is 31 lbs. (14 kg) per year, 1,025 trees are needed to offset the average carbon footprint of an American. Places with lower average footprints require fewer trees to offset their actions, and trees with higher carbon storage abilities can also lower this number. But, on average, you will likely need to plant over a thousand trees to cover your own yearly emissions output over the lifetime of each tree.  

How Do Carbon Offsets Help the Environment? 

Carbon Offset Environmental Help | Man Planting Treenvironmental help man planting treesource

Carbon offsets help the environment in a multitude of ways. First and foremost, they help in the fight against climate change by reducing the amount of carbon dioxide in the atmosphere, which in turn lessens the greenhouse effect that traps heat and warms Earth’s surface temperature. Higher temperatures are more likely to create problems in large-scale environmental systems, leading to more droughts, more intense storms, and melting glaciers, which will cause a rise in the sea level. Offsetting carbon is an important part of slowing this warming trend and giving ourselves a chance to reduce emissions at the source to avoid the worst of what climate change would potentially bring.

In addition to climate benefits, offsets help the environment by creating more forest cover and increasing biodiversity. Since most offset programs are centered on planting trees and protected forests, this allows for ecosystems to benefit from reforestation, which is a nice change from the centuries of deforestation that has been the global trend until the present day.   

What Are the Best Carbon Offset Programs? 

There are too many good carbon offset programs to name, but there are certain ones that are better than others when it comes to specific needs of consumers and the actions that need to be offset. For e-commerce platforms, Shopify has developed a leading carbon offset program that works specifically to offset the carbon emissions associated with supply chains in drop shipping and online stores. When it comes to travel and tourism, Sustainable Travel International is the best bet to offset indirect emissions, while Atmosfair is the best program to offset the emissions from your flights. Businesses of all sizes should take advantage of 3Degrees, which caters specifically to businesses looking to offset their Scope 1, 2, and 3 emissions (all of which are necessary to achieve true carbon neutrality). And lastly, the easiest to use and most beneficial to the average person is TerraPass, voted top pick by EcoWatch.  

It is reassuring to know that there are so many reliable and transparent offset programs out there helping to improve the environment. Whether it is for negating carbon emissions, restoring forest ecosystems, or increasing renewable energy availability, these and all the other available offset programs are helping the environment in ways that did not seem realistic even just a decade ago. Hopefully more and more people continue to take advantage of all these programs being offered to improve the global environment. 

Brought to you by terrapass.com
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