Understanding Carbon Offsets

Using Carbon Offsets

Recent years have seen a surge in interest in carbon offsets, and this is a good sign. It suggests public attention to climate change is growing, at a time when action to address it is more urgent than ever. As we make clear in this guide, offset credits are far from a perfect tool. If used carelessly, carbon offsets could slow progress on climate change and amount to little more than greenwashing. However, used responsibly, they can accelerate action on climate change beyond the slow pace that has so far been set and enabled through government policies.

Using offset credits responsibly requires, first, a strong plan for reducing one’s own greenhouse gas emissions. Simply buying credits instead of taking more direct and aggressive action – flying less, for example, or investing in improving the energy efficacy of your buildings, equipment, and vehicles – is not defensible given the strong need for aggressive action in all areas of human activity.

Responsible use also requires spending time to understand and seek out high-quality credits. Carbon offset programs provide a necessary level of quality assurance for the credits they issue; you should avoid offsets that have not been certified by an established program. But, whether this assurance is sufficient is another question. As explained in Section 4, whether a carbon offset has “environmental integrity” is not a binary question. Quality exists along a continuum defined by the level of confidence one has in an offset project’s additionality (first and foremost), as well as its quantification, permanence, exclusive claim to emission reductions, and avoidance of social and environmental harms. The issuance of an offset credit signifies – or should signify – that a project meets a minimum quality threshold. However, offset programs do not have spotless track records. You should not equate meeting a minimum threshold with high confidence in environmental integrity. It is important to understand the projects you are buying from, ask questions about key criteria (like whether a project has other revenue streams), and stick to project types that are more likely to fulfill basic quality requirements (as indicated in Sticking to lower risk project types).

Finally, voluntarily using carbon offsets to accelerate climate action is admirable, and arguably even necessary – there is no single “silver bullet” approach to solving climate change. However, buyers should never neglect the need for ambitious governmental policy responses. Using high quality offset credits to make a claim of carbon neutrality – even a highly defensible claim – is a detriment to climate action if it distracts companies, customers, and other stakeholders from pushing for stronger regulation and carbon pricing. Voluntary action cannot supersede policy action! And, coordination between voluntary actors and governments will be essential for ensuring a strong collective response to climate change. Carbon offsets should be seen as one element of this collective response, not a solution by themselves.