Carbon Offsets: What are they?

Posted by Leslie Bauer on Wednesday, January 28th, 2009 at 11:18pm.

The carbon economy is about to boom in the United States, particularly in California where state law will soon be forcing companies to track and pay for their carbon emissions. Pinpointing exactly what carbon credits and offsets are is difficult even for scientists on the frontlines of the emergent carbon economy, never mind lay people who are just beginning to hear about them.

A Definition
In a nutshell, carbon offsets represent the carbon removed from the atmosphere by a particular activity. Offset projects can range from simply planting trees to funding biodiesel plants, and can be purchased through a variety of brokers such as TerraPass, Native Energy, or Climate Trust, which work to connect consumers and companies with these projects. Such companies and organizations help you to calculate your carbon footprint—the amount of carbon your life and activities generate—and then sell you enough offsets to, theoretically at least, even out the balance.

The Carbon Challenge
The problem is that offsets are not always the carbon pay off they're cracked up to be. Even if you purchase something simple, like a tree planted on a distant prairie, it's not going to immediately remove the carbon that you just created. Trees take quite a while to grow, after all. Furthermore, it's often very difficult for consumers to tell to what their offsets are attached. In fact, they can be attached to nothing at all. If, for example, you buy offsets from a company that then invests your money it into a biodiesel plant, but something happens and that plant either never gets built, or is shut down, then your offsets don't equate to the reduction in carbon emissions for which you paid. Currently the carbon offset market in the United States is what is known as a "voluntary market," because companies are not yet required to curtail or pay for their carbon emissions. Because of this, offsets are virtually unregulated, which makes it difficult for consumers to know exactly what they're buying. When Assembly Bill 32 creates an official carbon trading scheme in California, companies will need to prove that the carbon credits they buy relate to real carbon emission reductions, which will create what is called a "compliance market" in the state.

Finding Quality Offsets
Fortunately, some companies already are working to address this problem by posting their portfolios online, enabling customers to see what sorts of projects their offsets are funding. TerraPass and EcoSecurities both recently did this, giving consumers access to photos, research, and reports related to their offset projects.

Third-party watchdog sites like Carbon Concierge, which recently released a detailed report ranking the top offset providers, also are helping consumers to find quality carbon offsets. The top five providers on the list were (in order of ranking): Native Energy, Climate Trust, e-Blue Horizons, Sustainable Travel International, and TerraPass. If you're in the market for offsets, first try to reduce your carbon emissions as much as possible. When your carbon footprint is as small as you can get it, these five providers are a great place to start looking for quality offsets to help, well, offset the rest.

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