Skip to content

Pros and Cons of Carbon Offsetting

Global warming is an issue which has provoked endless and heated debates. It is one of the most significant threats facing humanity today. Some believed that the global warming phenomenon was a hoax manufactured by some leaders to stop further mining and the use from fossil fuels. But the consequences are becoming apparent and include shifting weather patterns, which lead to massive crop failures, occurrence of more killer storms as well as rising sea levels which threaten to submerge many islands and force the displacement of millions of people, widespread extinction of plant and animal species, and the disappearance of coral reefs. The major contributor to global warming is the burning of fossil fuels, which emit vast amounts of greenhouse gases. Examples of greenhouse gasses are Carbon dioxide and methane fluorinated and nitrous oxide gasses like perfluorocarbons trifluoride, sulfur hexafluoride as well as hydrofluorocarbons.

For life to be sustained on the planet it is essential that the appropriate balance of carbon dioxide has to be maintained in the atmosphere. This is accomplished by neutralizing carbon dioxide released into the atmosphere from human activities like burning fossil fuels and driving vehicles and using household appliances as well as heating and cooling homes. However, no matter the amount of effort we make, it’s nearly impossible to avoid all emissions that are a part of environmental pollution. Carbon offsets come into play.

Carbon offsets are programs designed to reduce or eliminate our unavoidable footprint by buying carbon offsets from carbon credit exchange companies. Carbon offsets are credits for greenhouse gas cutbacks that are earned by an individual or a company which can be bought and used to offset(compensate) the emissions produced by another individual or entity. Carbon offsets are usually valued by tons in CO2-equivalents usually abbreviated CO2e. A single carbon offset is comparable to the diminution of one metric tons of carbon dioxide. They are purchased and sold via traditional platforms, international brokers, and online retailers.

In other words, carbon offset is nothing but investing in projects that cut down or avoid CO2 emissions or greenhouse gases to reduce their carbon footprint to protect the planet from the ravages of climate change. Carbon offset is a form mitigation. In order to offset the deadly carbon emissions, individuals or businesses purchase carbon offsets. It means that carbon dioxide emissions and other greenhouse gases that harm the environment are controlled and decreased elsewhere. You can calculate your carbon footprint here.

Carbon Offsetting projects aim to reduce the amount of CO2 or the greenhouse gas (GHG) emitted in the atmosphere. The results of these projects can be immediate or in the longer-term depending on the nature of the project. Let’s look at unconventional energy sources, or for that matter renewable sources. If we consider the investment in wind farms or hydro-power stations that are located in dams they are nothing but investments in reducing carbon emissions through carbon offsetting. Examples of carbon offset would include afforestation, solar energy models, the disposal of industrial and agricultural by products, etc.

In layman’s terms carbon offsets are designed to the reduction of greenhouse gas emissions in the hope of compensating for greenhouse gas emissions produced by someone else. Carbon offsets function in two primary ways, the cap-and-trade market or compliance market and voluntary market.

In the market for compliance, a government agency sets an upper limit of greenhouse gas emission in certain companies. Entities are required by law to adhere to the greenhouse gas limit. They achieve this by reducing emissions from their own operations. They can achieve the reduction in emissions by incorporating items to their facilities to increase efficiency, while minimizing emissions, or replacing their old vehicles with new generation, cleaner-burning automobiles. If an organization is able to reduce its emissions to less than the amount required by law it can offer credits for the additional cutbacks to other organizations that are having issues reducing their emissions in order to help them comply with the emission standards of minimum.

The voluntary market, on the other hand allows any individual or entity balance out their carbon emissions through financing projects that are spearheading campaigns toward reducing greenhouse gas emissions. Carbon offset projects could contain and store the gases and prevent their releases into the environment. Carbon offset projects might involve the planting and maintenance of forests or investing in alternative energy sources such as solar wind and geothermal, reducing the need to generate power from fossil fuels, which mightily contribute to emissions. Carbon offset projects could additionally include destroying greenhouse gases already in the atmosphere by the capture and neutralization of methane gas in landfills.

Pros of Carbon Offsetting

Governments aren’t able to tackle the whole issue the climate change issue. The only surefire way is to cooperate with the private sector, business and investors through carbon offsetting schemes. With that in mind, we’ll look at the advantages of carbon offsetting in more detail:

Makes clear the intent

Carbon offset is a solid claim and is credible in efforts to minimize emission of greenhouse gases. It’s practical because it goes beyond the usual talks and target setting that are that are part of policy-making. It’s evident from the amount of businesses and people who are flocking to this particular demographic to create a cleaner and safer world.

Old businesses are relevant in the present day

Most governments are taking steps to limit businesses and companies that contribute a lot in the production of greenhouse gasses. Carbon offsets will help save many old businesses from closure. How? Carbon offset programs require that businesses who emit more greenhouse gases than the set limit modify or add additional equipment or adjust their processes to improve efficiency, while at the same time reducing emissions. This can greatly assist in lower greenhouse gas emissions now and in the near future.

Encourages rapid growth of renewable energy technologies

Regarding how carbon offset is achieved in the market, the voluntary market permits individuals or entities to balance out their carbon footprints by financing projects that aim to reduce the emission of greenhouse gases. These projects include installation of wind turbines, solar panels as well as the installation of geothermal power plant and systems. This money will aid in driving up the speed of renewable energy development.

Determines the exact damage caused by greenhouse gas emissions.

Paying for carbon offsets can calculate the actual price of the damage caused to the environment through greenhouse gasses. The government and other institutions could employ this information to come up with exact budgets regarding carbon neutrality.

Helps to identify hot spots in the supply chain.

Carbon offsetting requirements will push business to invest a lot in inspection programs to identify hot spots (areas that could be contributing to greenhouse gas emissions) as well as allowing maintenance and the sealing off of those hot spots. This can save businesses lots of money to purchase carbon credits, if it emits more greenhouse gasses than the minimum requirement by law.

Business owners can learn more about their company

Carbon offsetting allows the owner to understand the carbon footprint of their business. It is measured to determine the exact figures, and then steps are taken to lower the amount of carbon emissions before offsetting is initiated. The owner also gets an opportunity to meet with offset project managers and get to know the details of carbon emission reduction and emissions.

Helps business owners spend their money in a wise way

If you decide to engage in carbon offsetting it will present problems with how you spend your money. Carbon offsets can help you determine if it’s worthwhile to spend your money on paying for carbon offsets or plow it into the business to reduce carbon emissions internally. The bottom-line is: the offsets are all interwoven so that it’s virtually impossible to reduce your carbon emissions completely.
Cons of Carbon Offsetting

Investment in cleaner and carbon-free methods could be overlooked

Carbon credits purchased through carbon trading could be used as a way of avoiding the need to reduce emissions by buying credits that require no investment in clean, renewable energy.

It’s an elaborate scheme

Carbon offset is a complex process. It is first necessary to convince individuals and companies to join in the loop and get them to commit to reducing carbon emissions. Then, there is the logistics involved in buying the carbon credits, which may require third party involvement. Payment systems can be a bit complicated. In addition, due to the fact that they involve invisibility, the likelihood of being played is high.

Fewer beneficiaries

The major recipients of carbon offset schemes are traders or NGOs as well as lawyers. Developers of projects don’t gain much, but they are the brains behind the project.

Complex red tape

Developers of projects have to navigate the complicated red tape to get the permits they require. This can take months. This is why only big projects have at a chance of financing the development costs.

All carbon offset initiatives must include:

Real: These carbon offset projects should not displace emissions elsewhere.

Permanent Intention: They should work towards cutting emissions or eliminating them completely.

Verifiable: The emission reductions that are reduced by these initiatives should be verified by third party to ensure that the emissions actually reduced.

The two different levels where carbon offset is carried out. Let’s begin by understanding the market for large-scale compliance. In the large scale compliance market, the participants are national governments, corporate firms, non-governmental groups, international organizations etc. They use carbon offsets as a part of social responsibility as well as to track the permissible total amount of green house gas emissions. The need to invest in this is also to adhere with the several guidelines they are expected to follow , similar to the Kyoto Protocol Annex 1 parties. It is common to see a company investing either in energy-efficiency or wind turbines program as their selection of carbon offset plans.

According to the Carbon offsets daily’s observation in their piece in 2008 entitled “Brands and carbon offsets” in this small market known as the voluntary market, about $705 million carbon offsets were purchased. If you calculate this, it amounts to around 123.4 million tonnes that were reduced in carbon. This level for carbon offsetting is at a lower extent than the first. However , it’s an integral part. Companies, or individuals make use of carbon offsets in order to fight greenhouse gases on a intimate and personal scale. They attempt to manage and curb the emissions from greenhouse gases that are released making use of transportation modes and electricity, as well as the combustion of fuels on a domestic level in addition to other tasks.

The scale for measuring carbon offsets are metric tons of carbon dioxide-equivalents , abbreviated CO2e. These include the major greenhouse gases viz. carbon dioxide (CO2) and methane (CH4) (CH4), nitrous dioxide (N2O) perfluorocarbons (PFCs), hydrofluorocarbons (HFCs) and sulfur hexafluoride(SF6). Therefore, when we refer to a offset of carbon, we are talking about the diminution of 1 metric tons of carbon dioxide or any other green house gases in the same way.

Let’s have a look at various Carbon offset initiatives.

Renewable energy offsets generally include hydro, wind, and solar energy projects. Biofuels can also be classified as renewable energy.

Methane collection and combustion is the next kind of carbon offsetting projects. This is the combustion and collection of methane produced by anaerobic source industrial waste, as well as methane generated from landfills.

Land use and forestry, attempt to build natural carbon sinks in forests and using the soil. The sub projects within these are reforestation, which is the restoration of a forest that used to be, and afforestation that is the process of creating a new forest space , and there is no deforestation.

Carbon offsetting in energy efficiency projects include co generation facilities. Co generation plants create electricity and heat from one source of power. This boosts the energy efficiency of the majority of power plants which, in other cases, waste the generated heat energy.

Under Fuel efficiency projects combustion devices are replaced by one utilizing less fuel per unit of provided energy. This assumes that the energy requirement does not alter.

Energy-efficient structures help reduce energy wasted in buildings. They utilize efficient heating, cooling, or lighting systems. A great example of the same could be replacing of light bulbs with fluorescent lamps. This can curb energy consumption to a large extent.

There are a variety of debates related to carbon offsetting, however it is viewed as an appropriate way to end the damage that has been done.