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The Ultimate Guide to Carbon Offsetting

what are cabon offsets

As much as we’d like to tackle climate change with an “every country or industry for itself” mentality, the reality is: the impact of greenhouse gas emissions is a global issue that requires a global solution. Even more challenging, we have no time to waste—it’s time for a change, stat.

Companies possess the ability to bridge the gap between nations, various sectors, and people. They hold a distinctive advantage in battling climate change through their influence in the marketplace, making corporate sustainability a key component in addressing this worldwide challenge.

This is precisely why carbon offsets are so pivotal, they empower countries and industries to cut their carbon footprint and collaborate on a sustainable future.

Let’s explore this further. In this guide we

  1. give an offsets definition,
  2. demonstrate the role of carbon offsets in combating climate change,
  3. and explain how they are created, verified, and where they are purchased.

What Is A Carbon Offset?

Let’s tackle the most obvious question first, what is carbon offsetting?

Carbon offsets are a means of taking responsibility for the amount of carbon dioxide released into the atmosphere due to human activities. This involves investing in programs or projects that remove and sequester carbon dioxide and other greenhouse gas emissions from the atmosphere—ultimately aiming to mitigate the effects of climate change. The amount of carbon dioxide emissions that are offset is quantified and traded on the carbon market as carbon credits.

We’ll explain what carbon credits and the carbon market are later on. But first, let’s check out why carbon offsets are so important.

For more specifics, see our full write-up on –  how do carbon offsets work?

Why Carbon Offsets Are Needed

Simply reducing greenhouse gas emissions is like putting a band-aid on a wound that needs stitches. Sure, it’ll stem the bleeding, but it’s not enough to reach our climate goals. The harsh reality is that greenhouse gases can linger in the atmosphere for decades or even centuries, continuing to impact the climate long after release.

So even if we were to stop emitting greenhouse gases entirely, we would still be dealing with the consequences and effects of past emissions for years to come. So to truly address the issue, we must go beyond reduction, removing GHGs from the atmosphere and safely storing them for the long haul. This is the key to achieving a net-negative carbon emissions state.

Let’s look at the most commonly discussed GHG, carbon dioxide (CO2), to demonstrate this.

This seemingly harmless compound has a remarkable ability to absorb energy, like the sun’s infrared (IR) radiation, trapping heat in the atmosphere and causing climate change.

On a small scale, this phenomenon really isn’t a big deal.

On a global scale, however, the mass release of carbon dioxide due to human activities like fossil fuel burning, deforestation, and environmental degradation, atmospheric CO2 levels have skyrocketed past 400 parts per million (ppm), exceeding levels not seen since the Pliocene epoch, some 3-5 million years ago.

what are carbon offsets


So what’s the play here? How can we reduce GHG concentrations and actively remove them from the atmosphere?

This is where carbon offset projects come in.

Explore our comprehensive list of carbon offset projects and learn how EcoCart effectively addresses climate change.

How Are Carbon Offsets Created?

Here’s how carbon offsets work: Let’s say an ecommerce business emits 5 metric tons of GHG emissions in a given year. Instead of reducing these emissions entirely, possibly affecting their profitability, the company—or in our case, its customers—purchases carbon offsets equivalent to 5 metric tons of GHG emissions from a carbon offset provider, like us, EcoCart. The provider then invests the money from the sale of the carbon offsets in a carbon offset project that reduces GHG emissions.

Easy peasy.

How Carbon Offsets Are Verified

To ensure that carbon offsets for businesses are credible and effective, it’s essential to have rigorous standards in place to verify that emissions reductions are authentic and permanent. Without such standards, there is a risk of “greenwashing,” where companies or organizations claim to be reducing their carbon footprint without actually making any meaningful impact on climate change.

This is why working with trusted providers that adhere to reputable carbon standards and undergo regular verification processes is crucial.

EcoCart’s carbon offsetting projects, for example, undergo lab and field testing with third-party verification and site visits to accurately calculate the amount of greenhouse gas emissions being offset. Our projects must be registered by one of the following carbon offset standards:

  1. Climate Action Reserve (CAR)
  2. Verra’s Voluntary Carbon Standard (VCS)
  3. American Carbon Registry (ACR)
  4. Gold Standard (IGS)
  5. Plan Vivo

Types Of Carbon Offset Projects

EcoCart partners with a diverse range of carbon offset projects, which fall into three main categories:

  1. Nature-based projects that focus on preserving and enhancing natural ecosystems to increase carbon sequestration. Examples of our nature-based projects include forestry projects that involve planting new trees or protecting existing forests, as well as wetland and grassland conservation efforts.
  2. Sustainable infrastructure that aims to develop and implement clean, renewable energy sources, such as wind, solar, and hydropower, and promote energy-efficient technologies. We also are involved with methane collection projects, which capture and convert the gas into a sustainable fuel source used for cooking.
  3. Improving livelihood that emphasizes the development of sustainable, low-emission economic opportunities for local communities. Energy efficiency projects that reduce energy consumption by improving the efficiency of buildings and household equipment like cooking stoves are examples of the initiatives we are involved with that improve living conditions while also combating climate change.
what are carbon offsets

Here are additional resources on ways to reduce your carbon footprint.

The Carbon Offset Marketplace

Carbon credits are a tradable commodity produced by carbon offset projects, then sold on the carbon market. These credits represent the removal of one metric ton of greenhouse gas (GHG) emissions or its equivalent (tCO2e) in other GHGs, such as methane or nitrous oxide.

Purchasing these credits allows companies to offset their emissions and meet their climate goals while simultaneously providing financial support to carbon offset projects that work towards reducing or removing greenhouse gas emissions.

Full circle.

The Two Types of Carbon Offset Markets

The carbon offset market is divided into two types: the compliance market and the voluntary market.

First the compliance market. The compliance market operates under government-mandated regulations, requiring companies to meet specific emissions reduction targets or face penalties. Due to the strict set of regulations and verification processes, they are typically more expensive than credits in the voluntary market.

On the other hand, the voluntary market is driven by individuals and companies who choose to purchase carbon credits to reduce their carbon footprint or offset their emissions. As a result, credits available on the voluntary market are often cheaper than those in the compliance market, as they do not need to meet the same regulatory requirements. However, they still undergo a rigorous verification process to ensure their legitimacy.

The voluntary carbon offset market is a big deal, worth an estimated $400 million USD and predicted to reach $10-25 billion by 2030, demonstrating the power of consumer demand and the good intentions of businesses.

Airlines are a great example of a voluntary market, with roughly 40 airlines globally offering voluntary offsetting programs to their customer base.

We have a whole additional post if you’re interested in learning more specifics about types of carbon offset projects.

Can Individuals Purchase Carbon Offsets?

Yes, most definitely. In the voluntary carbon offset market, individuals can purchase carbon credits to offset their own greenhouse gas emissions from everyday activities such as driving a car or flying on a plane. By doing so, individuals take action to reduce their carbon footprint and play a vital role in combating climate change and contributing to a more sustainable future.

Ready to take action against climate change?

Join EcoCart in our mission to create a more sustainable future. Find out how to calculate your personal carbon footprint and learn more tips about reducing your carbon footprint here.

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