What is Carbon Offsetting
Carbon offsetting is the process of reducing greenhouse gas emissions by funding projects that remove or reduce the same amount of emissions elsewhere.
Carbon offsetting works by allowing individuals or organisations to compensate their own emissions by investing in renewable energy, energy efficiency, biodiversity or conservation projects that avoid or reduce CO2.
When you invest in carbon credits, you invest in much more than the climate. Carbon offsets are aligned and contribute to the Sustainable Development Goals, whereby SDG 13 (Climate action) is the central focus point within projects. However, many offsetting projects also align to other development goals, such as No Poverty (SDG 1), Affordable and Clean Energy (SDG 7) & Life on Land (SDG 15). More and more companies adopt the SDGs within their policy and strategy implementation, including when investing in carbon credits.
The two main types are carbon reduction or avoidance, and carbon removal.
Carbon reduction are projects where emissions are being reduced or avoided. Examples are renewable energy, cookstoves, REDD+ forestry projects or regenerative agriculture.
Carbon removal involves directly removing CO2 (or other greenhouse gasses) from the atmosphere. This can be done with projects focusing on reforestation or afforestation, with soil carbon or ecosystem restoration. Also landfill gas capturing is a carbon removal solution.
Greenwashing is a term used to describe the promoted activities of an organisation when they are deceptively used to persuade the public that their products, aims and policies are environmentally friendly. Carbon offsetting can sometimes be seen as greenwashing, where companies make environmental claims that are not supported by their actual practices. To prevent carbon offsetting from being greenwashing, it’s important to choose offset providers that have credible certifications and have transparent processes for project selection and verification, including using third-party standards and verification processes.
To help ensure that your carbon offset purchases are contributing to real emissions reductions and supporting sustainable development, rather than being used for greenwashing purposes:
- Choose offset providers that are accredited by reputable organizations such as the Verified Carbon Standard (VCS), the Climate, Community and Biodiversity Standards (CCBS), or the Gold Standard.
- Ensure that the offset provider provides detailed information on the projects they support, including the location, type of project, and expected emissions reductions.
- Make sure that the projects are independently verified by a third-party organization to ensure that they are actually reducing emissions.
- Be wary of offset providers that make exaggerated or unrealistic claims about the impact of their projects.
- Consider other sustainability initiatives beyond carbon offsetting, such as reducing your own emissions, investing in renewable energy, and supporting sustainable development projects.
Buying Carbon Offsets
Carbon offsets can be purchased from trustworthy companies that specialise in offsetting, like Anthesis. The money from the purchase of carbon offsets goes to fund projects that reduce emissions, such as renewable energy, reforestation, and energy efficiency.
The difference in prices of carbon offsets can be due to various factors such as project type, location, and provider.
The credibility of offsetting
To ensure the integrity of an offset investment, it is important to look for offset providers with credible certifications and verify that the projects they fund are independently verified. To ensure that the money invested is being used effectively, it is important to choose reputable offset providers and projects that have credible certifications and are independently verified. In our extended quality criteria we explain more about our high standards.
The voluntary carbon market allows individuals and organisations to offset their emissions voluntarily, while the compliance carbon market requires emissions reductions from certain industries. The compliance market is used by companies and governments that by law have to account for their GHG emissions. It is regulated by mandatory national, regional or international carbon reduction regimes.
Businesses can lower the cost of offsetting by investing in energy efficiency and renewable energy, reducing their overall emissions and choosing cost-effective offset projects.
Climate-related FAQs
Greenhouse gases (GHGs) are gases that trap heat in the atmosphere, contributing to global warming and climate change.
Carbon footprint is used as a shorthand to refer to the total greenhouse gas emissions, although it specifically refers to emissions of carbon dioxide.
The Sustainable Development Goals are 17 global goals established by the United Nations to achieve a sustainable future for all. By funding projects that reduce emissions, carbon offsetting helps address climate change, which is linked to multiple SDGs such as SDG 13 (climate action) and SDG 7 (affordable and clean energy). Additionally, many carbon offset projects also support other SDGs by creating jobs and improving local economies (SDG 8), promoting sustainable agriculture (SDG 2), and conserving biodiversity (SDG 14).
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