What is carbon offsetting?

carbon-offsettingMost of the things we do on a day to day basis produce some level of carbon footprint. Switching on the light, taking a shower, putting the kettle on, driving to work, the clothes we wear and the food we eat – all of those things involve the consumption of energy to work or be produced. And despite the rise of renewable energy sources, energy is still for the most part created by the burning of fossil fuels. And burning fossil fuels releases carbon dioxide and other ‘greenhouse gases’, into the atmosphere. It is these greenhouse gases which are held responsible for the climate change which is currently threatening the balance of nature.

In an attempt to create a unified global response to climate change the UN’s Kyoto Agreement created an international system of carbon-caps and carbon trading. The outcome of the Kyoto Agreement was that developed industrial countries that had historically contributed most to global emissions would have limits placed on their carbon emissions which would be gradually reduced with time. The countries would pass these emissions caps on to the industries that contributed most to the total carbon emissions produced by the country obliging them to reduce their emissions through investment in carbon efficient technology and practices.

Carbon offsetting was introduced as a flexibility mechanism to help industries to cope with these new caps on their emissions. Carbon reducing projects were set-up around the globe and these projects are funded by the sale of carbon offsets. So, a renewable energy project in Africa, or a project in Asia aiming to reduce the pollution caused by farming in the region are financed by selling carbon offsets to western corporations. Approved experts will calculate how many tonnes of carbon equivalent emissions these projects save from entering the atmosphere and award a respective number of carbon offset units to the project annually. Western companies which are struggling to keep within the cap set by the Kyoto Protocol can buy these offsets in order to compensate for the number of tonnes of emissions by which they exceed their limit.

With time many companies and organisations have started buying carbon offsets out with the Kyoto Agreement as part of their corporate social responsibility initiatives. So companies which are not obliged by law to offset their carbon emissions are doing so anyway. Some environmentally conscious households now also buy carbon offsets.