Buying Carbon Offsets: What You Need to Know
When combined with other energy-saving efforts, carbon offsets can help you green your home, office and travel.
What are carbon offsets?
Carbon offsets represent reductions in greenhouse gases (GHG) that compensate (or offset) emissions from somewhere else. Offset projects such as wind farms and methane capture at animal farms or landfills help individuals, companies, or governments reduce their carbon footprint.
Offsets can be bought and sold voluntarily, or as a way for businesses and industries to lower their compliance obligations under cap-and-trade programs.
- Voluntary offsets allow individuals and businesses to counteract unavoidable carbon emissions by paying for reductions at projects that avoid or capture GHG emissions somewhere else.
- Under a cap-and-trade system, offsets can be used by businesses and industries to help them comply with the program. The Regional Greenhouse Gas Initiative in the Northeast and California's cap-and-trade program both certify reliable offsets.
While both voluntary and compliance offsets represent reduced emissions, cap-and-trade programs may have additional requirements or specifications for the types of offsets. The most important criteria for all offsets are Real, Additional, Verified, Enforceable, and Permanent.
Are some offsets better than others?
Yes, which means you'll have to do some homework before deciding which carbon offsets to purchase. It’s important to look for quality at the point of the project and at the point of sale, so that you receive real, unique emissions reductions.
To ensure the quality of the carbon offset project and reductions, several robust standards, verification processes, and credit registries have been developed.
- Offset project standards ensure that projects are additional (i.e. they are not legally required and would not have occurred in a business-as-usual scenario, meaning you’re making a difference) and that emissions reductions are real, verified, enforceable, and permanent.
- The Climate Action Reserve (CAR) is a program that sets high-quality additionality, quantification, and verification standards for GHG projects, and verifies, certifies, and issues certified credits for verified emissions reductions from those projects.
To ensure that you're getting the high-quality reductions that you're paying for, look for carbon offsets that have been certified at the retail level, the sales and delivery of which is independently verified.
- Oversight of the offset provider, and sale, in addition to the project, not only ensures use of high-quality project standards (as described above), but also correct and exclusive delivery of reductions, and truth in marketing.
- Green-e Climate is an independent certification for retail carbon offsets that contain only verified reductions from projects that meet high-quality, endorsed standards (including CAR), and which provides independent verification that the correct volume and types of reductions (i.e. certified reduction credits) have been exclusively delivered to you with sufficient and accurate disclosure.
Where can I find certified carbon offsets?
- You can look for the Green-e Climate certified logo on offsets being sold in the voluntary market.
- The Regional Greenhouse Gas Initiative in the Northeast and California's cap-and-trade program include approved offset protocols that meet the specific requirements of each program, under which compliance carbon offsets are issued.
Express your personal preferences. Ask offset providers about the kinds of projects they source from, how those projects ensure real environmental benefits, and whether the projects have any negative impacts.
You may find some offset projects more appealing than others –- such as supporting methane capture at a family farm versus a factory farm. Find out whether you agree with the activity before putting your dollars to work.
How do I figure out how many offsets to buy?
You can determine your greenhouse gas output using an online carbon emissions calculator, like the EPA's personal emissions calculator. Enter your car's gas mileage, your home's electricity bill and your recycling habits to find out how much CO2 you are adding to the atmosphere.
A tool, not a golden ticket
Offsets are meant to complement, not replace, efforts to reduce your personal carbon output or that of your business. For example, NRDC purchases offsets to mitigate carbon production from two sources that cannot be replaced by renewable energy: office heating, which uses oil or natural gas, and business travel. And for the latter, NRDC encourages video conferencing and less polluting modes of travel -– such as taking a bus or a train instead of flying.
Look to cost-effective internal reduction opportunities before looking to offsets. First, cut back on unnecessary personal energy consumption through purchasing energy efficient appliances, weatherizing your home or driving a hybrid car. Next, buy from renewable energy sources for electricity for your home and business. Finally, purchase carbon offsets to help fill in the gaps.
last revised 1/15/2014
Get Updates and Alerts
This Is Global Warming
Watch the Video »
Our new video shows the effects of global warming in the world today.
NRDC Gets Top Ratings from the Charity Watchdogs
- Charity Navigator awards NRDC its 4-star top rating.
- Worth magazine named NRDC one of America's 100 best charities.
- NRDC meets the highest standards of the Wise Giving Alliance of the Better Business Bureau.
- New National Research Council Study Delivers Roadmap to Put Electric Cars into Fast Lane
- posted by Roland Hwang, 4/22/15
- US Can and Must Rise to the Global Challenge of Climate Change
- posted by Jake Schmidt, 4/17/15
- Putting Heat Adaptation Plans into Action: Ahmedabad Shares Lessons with Leading Indian Cities
- posted by Anjali Jaiswal, 4/15/15