Understanding Carbon Offsets

Achieving Carbon Neutrality

Carbon neutrality refers to achieving a net carbon footprint of zero.[1] The term is often applied to an entire organization (or committed individual), but can also be applied to a product or activity (such as air travel). Since it is not possible for most organizations or individuals to completely eliminate all GHG emissions associated with their activities and products, carbon neutrality is typically premised on the idea of using external GHG reductions to balance emissions that cannot readily be eliminated. Carbon offset credits are the primary tool for achieving such reductions.

Carbon neutrality goals are growing in popularity, and on their face are highly ambitious. Achieving “net zero” emissions by 2050, for example, is increasingly seen as the benchmark for a “science-based” GHG reduction target.[2] One risk, however, is that carbon neutrality can mask what is ultimately required to avert climate change. Given their ease of use, it can be tempting to rely on carbon offsets as a primary means for meeting a carbon neutrality goal. In fact, as originally conceived, carbon offset credits were seen primarily as a way to lower the cost of meeting a particular GHG target, including carbon neutrality.

Under current circumstances, this approach to using carbon offsets would be a mistake. Collectively, all CO2 emissions from burning fossil fuels must cease altogether well before the end of the century: there will be little room for anyone to “net out” their emissions using someone else’s GHG reductions. Thus, although the idea of achieving zero net emissions is compelling and even necessary, the focus should be on reducing GHG emissions directly (and dramatically) in line with global mitigation goals. Arguably, organizations should only use carbon offsets on top of efforts to reduce their own emissions to near-zero by 2050.

A basic strategy would look like the following:

Figure: Steps to achieving carbon neutrality

  • Use carbon offset credits to cover any remaining GHG emissions from sources your organization owns or controls, and if possible, from your supply chain and product use.

[1] Similar terms, like “climate neutral” or “net zero” are largely synonymous.

[2] See, for example, https://sciencebasedtargets.org/step-by-step-guide/

[3] GHG targets in line with what is needed to achieve global climate goals are often referred to as “science-based” targets. However, there are numerous ways in which emission reduction burdens could be allocated across different sectors and countries to achieve a particular global climate goal. The “right” target for a particular organization could depend on numerous factors, not all of which are purely technical (Kartha et al. 2018; Kolstad et al. 2014). As such, “science-based targets” should be approached critically – and should never distract from efforts to demand policy action (Trexler and Schendler 2015). However, they can be useful for informing your organization’s voluntary climate change goals.