With the increasing awareness of global warming, more and more businesses are taking measures to keep their carbon footprint to a minimum. To achieve this, while some companies work to reduce their own emission-causing activities, others promote emission-reducing activities in other parts of the world. The latter strategy is known as a carbon offset.
Critics of this method believe that it gives companies an excuse to not take any steps to lower their carbon emissions. However, if carried out properly, carbon offsetting can act as a valuable tool to fight climate change.
What's a Carbon Offset?
There are two ways to define a carbon offset. Broadly speaking, carbon offsetting means either reducing greenhouse gas (GHG) emissions, increasing carbon storage (by planting trees or restoring land), or removing GHG from the atmosphere to make up for the carbon emissions occurring somewhere else.
However, when carried out by an organization or an individual, it takes a slightly different meaning. In this context, a carbon offset occurs when people or companies buy carbon credits to compensate for their own emissions. Here, one credit represents the emission reduction of 1 metric ton of CO2 or an equivalent value of other GHGs in some other part of the world. These credits are certified by governments or other independent, third-party organizations.
The money earned from selling these credits is mostly used to fund one or more environment-friendly projects. These projects aim to fight climate change by either preventing GHG emissions or removing the same amount of carbon from the air that was emitted by the polluting organization or person. To be considered authentic, these carbon offsets need to prove that the reduction in emissions is verifiable, real, and permanent.
How Do Carbon Offsets Work?
Most people pursue carbon offsetting voluntarily. Companies either reach their own GHG reduction goals or comply with certain government regulations. Once a company is sure that it can't reduce its carbon emissions without affecting its daily operations, the organization buys carbon credits from project owners who invest the money for activities that reduce carbon emissions — often in other parts of the world.
To understand the process, let's assume you take frequent flights that release significant amounts of GHGs into the atmosphere. Since you can't avoid taking flights due to the nature of your work, you decide to pursue carbon offsetting.
To achieve a carbon offset, you first use a tool to calculate the level of emissions released during your flight travel. You then buy carbon credits from a recognized broker to offset your level of emissions. After taking their cut, the broker invests the rest of the money into an environmental project like a tree plantation drive.
Once credits are bought, you, or the purchasing company, get a certificate or some other evidence of your purchase. Such a certificate is proof that you have taken a step toward reducing your carbon footprint — the amount of GHG generated by your actions — although in an indirect way. For companies, it would prove that they are complying with their environmental regulations by cutting GHG emissions into the atmosphere.
This helps when monitoring bodies check to see how sustainable such organizations are. To calculate a business's sustainability levels, these bodies minus their carbon offsets (proven emissions reductions) from their total emissions, which gives their net organizational emissions. If you, or the purchasing company, can show that you bought the same number of carbon credits as your carbon footprint, you will be deemed carbon-neutral having net-zero carbon emissions.
What Are Some Carbon Offset Examples?
There are various types of carbon offset projects all around the world. These projects usually come in two types, one that helps prevent GHG emissions, and the other that aims to reduce emissions.
Examples of carbon-offsetting projects are:
- Afforestation. Tree-planting projects are emission-reducing activities. Trees capture and absorb CO2 from the atmosphere and store it in the form of a biomass sink.
- Agriculture. Farmers use special techniques and technologies to grow crops efficiently while reducing wastage.
- Aviation. Some airline operators use artificial intelligence to optimize flight paths that help reduce the formation of contrail clouds.
- Landfill management. These projects focus on capturing methane — a potent GHG — from landfills used for waste disposal.
- Renewable energy. Power is generated using renewable energy sources like wind farms. These projects reduce dependence on fossil fuels — one of the biggest causes of global warming.
- Water management. Supplies clean water to places with contaminated or polluted water so that people living there don't need to boil or chemically treat the water.
What Are the Pros and Cons of Carbon Offset?
There are as many critics as there are supporters of carbon offsetting. As per its proponents, offset projects give companies a means to move toward net-zero emissions. If done right, they could contribute toward:
- Sustainable agriculture
- Ecosystem management
- Development of renewable energy systems
- Environmental conservation
But most detractors of carbon offsetting believe that such projects are just an attempt at greenwashing — the marketing tactic of making unproven claims that a company's products have a greater positive environmental impact than what's true. For example, by investing in such a project, you could make net zero claims without actually doing anything to cut your emissions. As per offset critics, this diverts the focus from doing real work to fight climate change.
Moreover, it has been found that many offset schemes are launched without the consent of the indigenous people who have their own land management practices in their local area. This not only puts such vulnerable communities at risk by distorting their economies but also leads to pollution and engagement of the local ecosystems.
Do Carbon Offsets Work?
Carbon offsets work in principle. GHGs are not localized but rather mixed throughout the atmosphere all over the world. So, it doesn't make a difference where it's being reduced as it still contributes to climate protection.
However, the problem occurs while practically implementing offsetting.
For carbon offset to be successful, the offset projects need to guarantee reduced emissions. Other barriers are the expensive equipment needed to measure the GHG being released into the atmosphere accurately. Moreover, such projects also need well-documented protocols and standards.
So, not all offset projects offer the desired result due to such challenges. This is why it's hard to assure that carbon offsets work and genuinely lower the GHG levels in the environment.