Carbon offset basics
- What is a carbon offset?
- How does carbon offsetting work?
- How will offsetting my carbon emissions reduce the threat of climate change?
- Are all carbon offsets created equally?
- What is a high quality carbon offset?
- Is offsetting a permit to pollute?
- Why buy carbon offsets?
- What is the difference between ‘carbon friendly’ and ‘carbon neutral’?
- How do I know that my money is really reducing GHG emissions in the atmosphere?
- Can I assign my donation to a particular project?
- How can offsetting be so inexpensive?
- Why do different offset companies have different offset prices?
- Will I receive confirmation for my online purchase?
- Can I deduct my offset purchase from my taxes?
- Can I purchase from Offsetters if I live outside of Canada?
- Things to consider when choosing an offset provider
What is a carbon offset?
A “carbon offset” (a.k.a. a carbon credit, a VER, or a CER) is a greenhouse gas (GHG) reduction that is used to counterbalance, or offset, a greenhouse gas emission.
A carbon offset occurs when an individual or organization emits a given amount of GHG emissions but invests in measures that remove the equivalent volume of GHG emissions out of the atmosphere or prevent the emissions from taking place at all. Carbon offsets are a financial instrument that represents this reduction in GHG emissions. Buyers of carbon offsets include individuals, companies, and countries.
How does carbon offsetting work?
Carbon offsetting offers businesses and individuals the opportunity to offset unavoidable emissions with emissions reduction activities elsewhere. Because greenhouse gas (GHG) emissions have the same effect on the planet regardless of where they are produced, it does not matter where the emissions are released or where they are reduced.
After businesses and/or individuals calculate the amount of GHG emissions they are responsible for creating (e.g. by conducting a GHG emissions audit, or by using a carbon calculator), the business or individual pays a specific amount according to the emissions created. This money is used to invest in carbon offset projects that will reduce GHG emissions elsewhere. It is important to ensure that offset projects are developed to rigorous standards such as The Gold Standard, The Voluntary Carbon Standard (VCS), or government-regulated standards to ensure high quality carbon offsets.
How will offsetting my carbon emissions reduce the threat of climate change?
Your offset purchase, pooled with other buyers of offsets from Offsetters, directly results in reduced greenhouse gas (GHG) emissions. We invest your money in projects that permanently and immediately reduce the amount of GHG emissions entering the atmosphere (NOT by using questionable reduction methods such as tree planting).
With every project, we demonstrate environmental and social benefits of emerging energy saving technologies. Consequently, your investment not only offsets your own emissions but also promotes the mainstream adoption of alternative energy systems, which ultimately will reduce dependence on fossil fuels.
Are all carbon offsets created equally?
No, at present, voluntary carbon offsets are an unregulated market. Many projects promoted as offsets today fail to meet the basic standards of additionality and permanence. Remember that if a project would have taken place without your investment, then it likely fails the additionality test.
All Offsetters projects are third-party verified to be additional, real, and permanent. We invest in energy efficiency and renewable energy projects that unequivocally reduce the amount of greenhouse gas emissions entering the atmosphere.
What is a high quality carbon offset?
Offsetters adheres to certain criteria in order to create high quality carbon offsets. When evaluating which projects to develop and invest in, we only choose projects that are:
- Additional: Offsetters’ investments lead to real reductions in total greenhouse gas emissions by enabling projects that would otherwise not take place. Our funds help to overcome a barrier (financial and/or technical) that would have prevented the project from happening, and we ensure that the emissions reductions are additional to business as usual. This is one of the most critical criteria for offset project development.
- Real: All emissions reductions are third-party validated at the beginning of the project and then verified to have actually happened. We enlist engineering and accounting firms that are accredited to do this. Our carbon credits are sold at the end of this process, once the emissions reductions have been realized, so that our clients can feel confident that their financial contribution has measureable benefit.
- Permanent: The emissions reductions are lasting and cannot be reversed.
We also make sure all our projects have significant positive co-benefits in addition to lowering GHG emissions. For example, we have provided funding for the installation of ground source heat pumps in a number of community organizations (schools, First Nations band offices, community centres, etc.).
The heat pumps have up to 75% lower operating costs than the incumbent technology, and the savings are used to improve the social programs available to the community.
Finally, we recognize the major critiques of carbon offsets and only choose projects that avoid or account for:
- Double Counting: The offset can only be claimed by one person: the final buyer of the carbon credit. We register our offsets on recognized registries (APX, Markit and the Gold Standard registries) to ensure that each credit is counted by one party only.
- Inconsistent Timescale: Our projects create emissions reductions right away. Unlike tree planting offset projects, there is no payback time. The emissions reductions take place in the year you buy the offsets or earlier.
- Leakage: We look at all potential sources of emissions generated by our projects and factor these into our carbon accounting. For example, if a project uses a lower emissions fuel source but requires trucking in that fuel source, then we take the additional transportation emissions into our accounting of the total emissions savings.
These are the same high standards that rigorous certifications such as the Gold Standard and the Voluntary Carbon Standard use.
Is offsetting a permit to pollute?
Definitely not! Every individual and organization has a responsibility to lower emissions whenever possible by walking or cycling instead of driving, teleconferencing instead of flying, and choosing other lower impact lifestyle and business choices. But there are still many activities for which we do not yet have low emissions alternatives. After reducing emissions by improving energy efficiency and lowering consumption, offsetting is an effective complementary tool to further reduce greenhouse gas emissions.
Offsetting is just one way that individuals and companies can actively contribute to climate change mitigation. Tracking the climate cost of one’s practices (in both tonnes of emissions and in dollars) leads to awareness and awareness encourages changed behaviour.
Why buy carbon offsets?
Carbon offsets are part of the solution. When you engage in an activity that emits greenhouse gases, you can balance out that emission by purchasing a carbon offset – an emission reduction credit – that directly supports a project or activity that results in a given amount of greenhouses gas being avoided or reduced.
Emission reductions that are real, additional (they wouldn’t have happened without the purchase of offsets), measurable, permanent and verified can generate offset credits.
Carbon offsets are not the solution to climate change but, used properly, they are a tool for advancing the transition to more sustainable energy. Offsets do two important things:
1) Support the overall reduction of carbon emissions into the atmosphere, and
2) Invest directly into clean technologies of the future.
While your emissions, from flying or driving for example, have still occurred, the offset credit you purchased has enabled a reduction of greenhouse gases elsewhere.
What is the difference between ‘carbon friendly’ and ‘carbon neutral’?
‘Carbon friendly’ clients engage in understanding, calculating, and reducing part of their greenhouse gas emissions. ‘Carbon neutral’ clients go one step further by offsetting all greenhouse gas emissions such that the organization or individual achieves net zero emissions.
How do I know that my money is really reducing GHG emissions?
You can be confident that purchase of an Offsetters carbon offset will achieve the promised emissions reduction because we have dramatically shortened the supply chain from investor (you) to project. Unlike many offset providers that outsource project management or purchase offsets on the open market, we play a hands-on role in all of our domestic projects, ensuring that they are implemented as proposed and that projected GHG savings are realized.
All of our projects exceed Canadian standards for offsets, and are consistent with the Voluntary Carbon Standard and Gold Standard requirements for offset quality.
Third party engineering firms verify each of our projects to confirm that the emissions have actually taken place.
Can I assign my donation to a particular project?
In general, we pool your money to fund a portfolio of domestic projects that reduce greenhouse gas emissions. This allows us to best manage our GHG reduction commitments by balancing cost (some projects are more expensive per tonne of CO2e to produce than others, but may generate a wider range of sustainability benefits) and risk (some projects offer great rewards but carry a higher risk of not delivering as many emissions reductions as expected).
We also offer international Gold Standard-certified offsets, from projects located in the developing world. Please write to us at info@offsetters.ca to purchase these offsets.
If you are a company in a position to offset a large number of emissions (>10.000 tonnes), we can invest your funds with a particular project.
How can offsetting be so inexpensive?
Offsetters has a portfolio of projects; some projects are less expensive, some are more expensive. But the combined purchasing power of all of our clients gives us considerable financial power.
There are important factors that underlie the affordability of our high quality offsets:
- Offsetters pays just the incremental (not total) cost of renewable energy and/or energy efficient systems over traditional systems. Our investments are used to tip the balance to make clean energy projects cost effective for the project proponent, thus meeting our “additionality” requirement. In some cases our investment leverages other funds, making this even more cost effective.
- Once installed, alternative energy systems will reduce emissions for their entire installed life. For example, installing a ground-source heat pump in lieu of a gas furnace in a housing complex leads to energy cost savings of 70% and GHG emissions reductions of 80%. Because the system can be expected to last at least 15 years, the total GHG savings of the heat pump system are vast relative to our initial investment.
Why do different offset companies have different offset prices?
When you buy an offset, the price will be determined by two factors:
- The amount of GHG emissions that are calculated from your activity, and
- The cost of the project supported per tonne of GHG emissions avoided.
Emissions calculations will vary slightly according to the assumptions made in particular methodologies; the main difference is more likely to be the price of the offsets being sponsored. As noted elsewhere in these FAQs, Offsetters is proud of the quality of offsets it offers and of the efficiency of our operations.
Will I receive confirmation for my online purchase?
By purchasing from Offsetters, you will receive all of the following:
- The good feeling of taking action towards mitigating a serious environmental problem, and the right to demand that others do the same;
- A confirmation of purchase from PayPal to the email that you provide; and
- An e-Certificate verifying the amount of GHG emissions (CO2e) your purchase has removed from the atmosphere, showing that you are part of a growing community of people and companies that are actively taking responsibility for their actions.
Can I deduct my offset purchase from my taxes?
Businesses can write off offset payments as part of the cost of doing business. Because we are not a registered charity, however, we cannot issue you a tax receipt.
Can I purchase from Offsetters if I live outside of Canada?
Certainly! Global warming is a global problem, and its impacts are not limited to any geographic boundary. You can purchase from Offsetters online with your credit carbon or PayPal account, no matter where you live.
A few things to consider when choosing an offset supplier
- Are the offsets real, additional (they wouldn’t have happened without the purchase of your offsets), measurable, and permanent?
- Are the offsets certified, and to what standard?
- Are you enabling local or international projects?
- What is the project type? You may want to pick a project that has special meaning to you.