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[W467]What Is Carbon Offset

by James Nash, Jam

Every day people do dozens of things that put more carbon dioxide into the atmosphere. This gas is the main perpetrator of climate change, yet activities like driving, heating your house, air travel, and electricity consumption, are hard to stop. Individuals that want to reduce their carbon footprint, the amount of carbon dioxide generated in a year, have the option of buying carbon offsets, often called renewable
energy credits, or RECs

Carbon offsets are projects that decrease the amount of greenhouse gases (GHG) like carbon dioxide in the air to counterbalance the amount that an individual has emitted. These projects can include, but aren't limited to planting trees (carbon sequestration), erecting wind turbines or solar panels, reducing methane (a greenhouse gas more potent, but less common than carbon dioxide), or updating manufacturing processes to use less fossil fuel.

To offset the average US household energy consumption of 10,656 kWh per year, 3Phases, a large wind company in the Midwest, charges $213.00. 3Phases will use this money to produce, in theory, 10,656 kWh extra in wind energy by building that many more turbines. This new renewable energy will be added to the grid in the place of conventional energy, like coal. The pricing of carbon offsets for alternative energy firms is based on the price difference between fossil fuel energy production and the alternative energy production per kilowatt hour.

In all cases, the money from the offset purchase must instigate additional reductions by the company. Otherwise, the price of the credit will not accurately reflect the amount of GHG reductions it caused. Community Energy Inc., a Pennsylvania-based organization operating in New Jersey, is one of several companies doing the same thing.

As offset purchases have become more popular, journalists and researchers have raised the alarm and cautioned consumers about offsets that do little more than make you feel good. The major concern centers on additionality. Carbon mitigation is only additional if it occurs at a level above the baseline level, also called 'business as usual'. Ideally, the offset you buy should initiate extra reductions that could not have happened without the money you spent. Additionality is hard to measure: large firms are already working to reduce their GHG-producing activities, and offset purchases, especially small ones, may not actually instigate enough new activity to fully offset the promised amount of kilowatt hours.

A recent New York Times article publicized these problems. To many environmentalists, the carbon-neutral campaign is a sign of the times, easy on the sacrifice and big on the consumerism, Andrew Revkin reported in his piece Carbon Neutral Is Hip, but Is It Green? Revkin quotes Denis Hayes, a leading sustainability activist and expert; the worst of the carbon-offset programs resemble the Catholic Church's sale of indulgences back before the Reformation, he says. Instead of reducing their carbon footprints, people take private jets and stretch limos, and then think they can buy an indulgence to forgive their sins.

In the past year, researchers discovered that Al Gore, director of the climate change documentary An Inconvenient Truth, has a carbon footprint twenty times the national average; his mansion consumes almost 221,000kWh (kilowatt hours) a year. Gore buys offsets to legitimize this enormous fossil fuel consumption, but many question if his offset purchase actually exempts him from his climate change sin.

Citizens in China use an average of 6 carbon tons per year, and in India, the average is less than half that. In the United States, however, the average person generates around 25 carbon tons per year. Many environmentalists feel we should be reducing our carbon consumption by taking big steps to change our personal and organizational habits and use different technologies and/ or fuels, instead of taking the easier path of changing nothing, and spending money to transfer the reduction responsibility to others. Different offset providers have different pricing schemes, which further complicates the issue of additionality.

Most people familiar with the offset market, including offset providers, encourage individuals first to take steps to reduce the amount of energy they use before making an offset purchase. Conserving electrical energy by turning off lights and computers at night, buying fuel-efficient appliances and vehicles, and being an informed consumer about the food you buy can all make significant reductions in your carbon footprint.After taking these steps, only carbon offsets can mitigate the remaining GHG emissions, allowing individuals to go completely carbon neutral.

In summary, trees don't reduce carbon, they sequester it for as long as they live. Energy conservation is probably the best way to lower your carbon footprint.
Carbon offsets essentially fund additional carbon reduction that would not happen otherwise.

Individuals and institutions have 3 ways to lighten their carbon footprint:

1) Reduce your own energy consumption
2) Replace dirty energy with clean
3) Facilitate and fund energy conservation by others, particularly those who cannot afford to do it themselves

The term carbon offset means that you attempt to mitigate or reduce the effects of your emission of greenhouse gases by trying to do other activities which may have an equivalent value. For example, you might attempt to mitigate your carbon footprint or amount of carbon dioxide that you are responsible for producing because you own a private vehicle, by planting many, many trees in your community. To mitigate means you are offsetting your carbon emissions rather than reducing the degree to which you create carbon emissions in the first place.

The term carbon offset is used in close relation to the concept of emissions trading. In emissions trading, a government agency is usually responsible for setting mandatory limits for emission of a type of pollutant. If the enterprise is able to stay within limits for emission of that pollutant, the government will grant economic incentives to the enterprise as a reward for reducing pollution released into the environment. Strangely enough, if an enterprise has surpassed the limit for the emission level of the pollutant, the enterprise has the option of purchasing "credits" from other enterprises which have been able to stay well within emission limits. A credit represents how much emissions an enterprise is permitted to release into the environment.

The same principle used in emissions trading has been set into place through the adoption of the global Kyoto Protocol carbon credits scheme. Carbon credits designates a monetary or financial value to greenhouse gas emissions. For instance, one credit means the owner of the credit has permission to release one tonne of carbon dioxide. The Kyoto Protocol is one internationally-recognized treaty which defines the limits of emissions that entire countries can release into the environment over a certain period of time. These countries are then responsible for regulating the businesses or enterprises which operate in their jurisdiction, as far as their level of emissions are concerned. Just like in emissions trading as shown above, the carbon credits scheme allows businesses which have surpassed the permitted amount of emissions released to purchase carbon credits from those businesses which have been able to stay within emissions limits. An interesting aspect of carbon credits is that they can be traded on an open market level as well, with a market price being observed.

On the other hand, there are companies which are able to observe a carbon project mechanism in the way they operate. A carbon project pertains to a business program where the enterprise attempts to reduce its total level of greenhouse gas emissions so that the company will receive funding in return (as a reward, so to speak.) Carbon projects are better than simply buying carbon credits because it means the business is attempting to voluntarily cut down on its greenhouse gas emissions. Some enterprises choose to adopt a carbon project because they may have been guilty of surplus emissions in the past, and saw the carbon project mechanism as being preferable to paying a carbon tax or buying carbon credits from other enterprises. (A carbon tax can be perceived as a default penalty to be paid by the enterprise because it surpassed limits for emissions.)

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Both James Nash & Martin Barwise are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

James Nash has sinced written about articles on various topics from Environment, Painting and Environment. James Nash is a climate scientist with Greatest Planet (). Greatest Planet is a non-profit environmental organization specialising in carb. James Nash's top article generates over 368000 views. to your Favourites.

Martin Barwise has sinced written about articles on various topics from Global Warming, Environment and Travel and Leisure. sells eco friendly gifts and energy saving gadgets. We have various energy saving gadgets such as the Smart Adapter which is a remote control plug set wh. Martin Barwise's top article generates over 12100 views. to your Favourites.