We hear a lot about brands offsetting their carbon footprint. But what does that really mean?

Carbon-intensive processes like manufacturing and transportation are critical to producing the stuff we buy, which means everything we purchase has an environmental footprint. It’s the reason a 2015 study found household consumption contributes to 60 percent of greenhouse gas emissions worldwide. (Carbon dioxide is the most prevalent greenhouse gas, accounting for three-quarters of global emissions, according to the Center for Climate and Energy Solutions.) 

And in the face of a worsening climate, brands know people increasingly care about the environment. That’s why the option to offset our purchases with carbon credits is more commonplace than ever. But what is the carbon offset market, really, and how does it work? When you buy carbon credits to offset the purchase of a laptop, for example, can you walk away guilt-free? And what role do the companies making the products play in all this? 

Here’s everything you might be wondering about the carbon offset market. 

What are carbon offsets? 

Individuals, governments, and businesses use carbon credits to offset activities that release carbon dioxide or other greenhouse gasses into the environment. A carbon credit represents one metric ton of carbon dioxide. Entities purchase these credits when they aren’t able to reduce emissions.

“When you purchase a carbon credit, you are paying to avoid or to remove one metric ton of carbon dioxide or other greenhouse gas from the atmosphere,” says Lauren Frisch, who leads program impact work for Climate Neutral, a nonprofit that helps organizations eliminate carbon emissions.

For example, imagine you’re a tech company intent on reducing your environmental impact. Following the pandemic, you gave your workforce the option to work from home 80 percent of the time. But you still require employees to attend quarterly retreats at your company headquarters; and executive-level staff regularly commute to the office. All of this transit, though reduced, contributes to your company’s overall carbon footprint. You might purchase carbon credits to offset the CO2 that’s released into the atmosphere when your staff travels for work, with the intention of providing more environmentally friendly options and supporting public transportation initiatives over time.  

Lake Surrounded By Mountains

A carbon credit represents one metric ton of carbon dioxide. Photo courtesy of Pexels.

Read more: What Are Carbon Offsets? 

Why do carbon offsets matter? 

Simply put, climate change. The Intergovernmental Panel on Climate Change (IPCC), in its Sixth Assessment Report, found communities across the globe are already experiencing the grave consequences of a warming planet. If countries want to limit global warming to 1.5 degrees Celsius above pre-industrial levels, which the IPCC has cautioned we must do to avoid the worst effects of climate change, global greenhouse gas emissions must peak before 2025, at the latest, and we must achieve net zero carbon emissions by the early 2050s. 

“Without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5 degrees Celsius is beyond reach,” the IPCC stated in the release of its report. 

“It’s important to assess risk and performance with real data to ensure that when you purchase a credit, you can be confident you’re avoiding or removing a full ton of emissions.”

 

Reducing our reliance on fossil fuels is a key step to mitigating climate change, but breaking a fossil fuel habit, whether you’re an individual or a business, takes time. Purchasing carbon offsets is a way that entities can reduce their impact in the short-term. Still, experts — including business leaders, scholars, and Frisch — say that offsets are just one piece of the complex puzzle of reducing global emissions. 

 

What are the different types of carbon offset projects? 

Some of the most well-known carbon offset projects are forestry- or nature-based. These projects conserve a swath of land from development, promote sustainable agriculture initiatives, or plant forests that sequester carbon dioxide over time. There are also carbon offset projects aimed at renewable energy, capturing methane emissions from landfills, offsetting industrial gasses, and supporting more energy-efficient systems

And there are categories of offset projects. Carbon avoidance projects keep emissions from entering the atmosphere in the first place. “If you’re purchasing a renewable energy credit, you’re avoiding additional fossil fuels from being burned by transitioning to renewable energy,” says Frisch. 

Carbon removal projects, on the other hand, remove carbon from the environment, as in reforesting initiatives that focus on planting carbon-sequestering trees. 

Some projects cover both categories. “This is especially common for forestry projects,” says Frisch, “You might have a project that works to avoid future deforestation while planting new trees.” New trees act as carbon sinks, removing carbon from the atmosphere, whereas preserving the land eliminates the risk that the land could be used for future carbon-intensive development. 

Ocean

If countries want to limit global warming to 1.5 degrees Celsius above pre-industrial levels, which the IPCC has cautioned we must do to avoid the worst effects of climate change, global greenhouse gas emissions must peak before 2025, at the latest, and we must achieve net zero carbon emissions by the early 2050s. Photo courtesy of Pexels.

Read more: What You Need to Know About Carbon Capture

What are some of the challenges in assessing the integrity of carbon offsets? 

Recently, the carbon offset market has come under fire. Everyone from late-night TV hosts to researchers and journalists suggest that certain carbon offset projects don’t achieve the carbon savings they say they do. And consumers are understandably skeptical of companies that tout their emissions offsets without outlining steps to make their businesses more sustainable as a whole. 

Read more: What Is a Carbon Tax?

Part of the challenge in vetting carbon offsets is they must forecast a positive impact on an ecosystem over time. Projects can model what’s known as “future carbon performance,” but that performance can be tough to predict. However, new strategies and technology are making it easier for projects to collect continuous and rigorous data, says Frisch. 

“Offsetting is a great way to account for what you’ve already emitted — or the emissions that you can’t avoid. We aren’t going to meet global targets if we offset without also setting plans to reduce emissions.”

 

High-quality projects do a comprehensive job of measuring and monitoring carbon over many years. They also assess risks to predict the long-term permanence of the project. “It’s important to assess risk and performance with real data to ensure that when you purchase a credit, you can be confident you’re avoiding or removing a full ton of emissions,” says Frisch.  

Not only do offset projects need to demonstrate that they’re avoiding or removing carbon from the environment in a way that wouldn’t naturally occur — a concept known as additionality — they must also evaluate long-term risks to the project. For example, scientists recently expressed concern about the vulnerability of California-based carbon offset projects to wildfires. In these cases, projects must put in place “buffer pools” — a sort of carbon offset insurance that they can draw on if their initiative is compromised by, say, a wildland forest fire. 

Carbon registries help regulate the offset market by requiring that offset proposals be verified against international standards. The four main carbon registries are American Carbon Registry, Climate Action Reserve, Gold Standard, and Verra. Organizations like Climate Neutral take things a step further by adding their own standards. 

“Offsetting is a great way to account for what you’ve already emitted — or the emissions that you can’t avoid,” says Frisch. Still, “We aren’t going to meet global targets if we offset without also setting plans to reduce emissions. Part of what we do at Climate Neutral is to ask brands to set both short- and long-term strategies for how they’ll work towards global decarbonization while they’re offsetting in the interim.”

 

Should I offset the purchase of a computer or flight? 

It’s up to you whether to purchase carbon credits to offset a purchase — especially if it’s something you deem non-essential (like say, a second laptop). But instead of passing the responsibility to consumers, companies need to take a critical look at their direct and indirect emissions. A recent assessment found that the world’s 25 largest companies — including Apple, Google, and Amazon — are responsible for roughly 5 percent of worldwide greenhouse gas emissions. Long story short: Companies are big players in the global emissions game. 

When you do shop, prioritize brands that are transparent about how they’re reducing emissions, beyond simply offsetting. Climate Neutral-certified brands, for example, must set quantifiable targets for how they’ll achieve climate neutrality (or go carbon negative, as with Avocado), in addition to purchasing offsets from reputable projects in the near-term. 

Desert At Sunset

The four main carbon registries are American Carbon Registry, Climate Action Reserve, Gold Standard, and Verra. Photo courtesy of Pexels.

Read more: How Unsustainable Is Flying?

What else can I do? 

Tracking your emissions is a powerful first step in reducing your impact. In fact, research shows people who track their emissions may be more effective at reducing them. There are two apps that make it easy to monitor your emissions and purchase offsets from verified projects. Joro is designed for U.S. and Canadian consumers, while Compensate is for use in Europe and the U.K. Both apps publish information about the projects they invest in, so check to see if they align with your values. 

You can also advocate for systemic change. Beyond holding corporations accountable, urge Congress to pass additional climate legislation like the Inflation Reduction Act, which President Biden signed into law this past summer, that takes steps to support families and reduce inflation across sectors. Among its actions, the bill offers incentives to lower energy costs, fuel clean energy jobs, and reduce our dependence on fossil fuels. 

Support new legislation like the Growing Climate Solutions Act that would make it easier for farmers and landowners to participate in offset markets, as well as the Agriculture Resilience Act, which supports soil health in an effort to reduce the emissions that come from growing the food we eat.  Both pieces of legislation could be up for a vote before the end of 2022. 

There’s also the Farm Bill, legislation that expires every five years and expires in 2023. Depending on how the 2022 midterm elections play out, the new Farm Bill may include climate-forward elements, like agriculture programs that incentivize greenhouse gas reductions and research into the return on investment of regenerative and organic farming. Support this work by voting for candidates who advocate for climate action. 

Finally, a lot of political progress is happening at the state and local level, including the phasing out of gas-powered cars in California, Washington, Massachusetts, and New York. Become involved in the politics unfolding close to home by following your local elected officials. Ballotpedia is a good resource for tracking climate-related and other important ballot measures that will be up for a vote in the 2022 midterms in states across the U.S. 

Read more: How to Be a Climate Activist

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