Carbon Offset: What does it mean?

By William Morris

Content editor

Carbon emissions are the most prevalent type of greenhouse gas and one of the primary causes of global warming and climate change on a planetary scale. Carbon offset is gaining popularity as a way to mitigate environmentally harmful emissions produced by many modes of transport, energy production and agriculture. Let’s see how it works and how you can help.

What does it mean to carbon offset?

Carbon offset is the process of compensating for the carbon emissions you are responsible for in your daily life, usually by helping to fund other activities which reduce carbon emissions.

The carbon offset process is based on the idea that all of us have a carbon footprint. This footprint takes into account the carbon emissions generated by your day-to-day actions. In order to compensate for the carbon emissions created, participants purchase carbon credits that finance initiatives that reduce greenhouse emissions elsewhere.

These are some examples of daily activities that carbon offset schemes take into account when calculating a household’s carbon footprint:

• Travelling by car, bus, train, plane or boat
• Shopping
• Heating your home or water for a shower
• Running your washing machine, tumble dryer or dishwasher

Your carbon footprint measures the impact your actions and decisions have on the environment. This is done by adding up the carbon emissions caused by everything you do, eat, buy and throw away. Your carbon footprint is measured in tonnes of carbon dioxide (CO2) released into the environment due to your actions.

Carbon offset is an initiative that gives households and businesses the opportunity to back environmentally-friendly infrastructure projects in order to compensate for the carbon emissions they are responsible for.

The green initiatives that are being funded by carbon offset schemes are usually located in developing countries and have the aim of bringing down emissions as their economy grows.

While some carbon offset participants aim to make up for all their carbon emissions, other people may choose to offset only part of their estimates or only account for specific sources of greenhouse gases, such as driving or air travel.

How much does carbon offset cost?

The cost of carbon offsetting depends on:

1. What the estimated carbon footprint is for each participant.
2. How much of the carbon footprint each participant wishes to offset.

Your carbon footprint is generally measured in tonnes of carbon per year, as opposed to an ecological footprint, which is measured in hectares needed to provide for a person's needs. Let’s take a look at some average carbon footprint figures for British households by focussing on carbon emissions generated by energy use and how much the corresponding carbon offset would cost.

It’s worth bearing in mind that, if you get your energy from a 100% green energy company, you don’t need to include electricity usage in your carbon footprint. On the other hand, green gas is in short supply currently. Therefore, it is much more likely that gas use will contribute to your personal carbon emissions, at least partially

Some, but not all energy companies, build carbon offsetting into their gas tariffs. For this reason, it’s worth checking your tariff fine print or speaking with a knowledgeable energy advisor who can point you in the right direction so you can do your bit for the environment.

Ultimately, you decide how much you want to offset and your decision doesn’t have to be grounded in your carbon footprint. You could offset a lesser amount based on your personal circumstances or more than your share because you are passionate about the environment. Either way, you are making a positive contribution.

What are the causes of carbon emissions?

The primary contributors to carbon emissions and global warming are energy use, food production and transport.

Energy consumption

Natural gas is a greenhouse gas, which means it goes right up there in your carbon footprint. The more you heat your home or use hot water through a gas-fired boiler or central heating system, the more carbon emissions you will produce.

Electricity isn’t necessarily off the hook either. Almost 30% of UK electricity is generated by gas-fired power stations that use large amounts of natural gas to operate. There is also a bigger culprit: coal. When it comes to carbon emissions caused by electricity generation in the UK, coal is a much worse offender. Thankfully, the role of coal in the UK is beginning to wane thanks to cheaper renewable alternatives.

There are energy providers that do strive to source electricity from renewable sources. By choosing them, you are cutting down on your carbon emissions significantly.

Food production and waste

Growing, processing, transporting, storing and discarding of food results in sizeable carbon emissions. A residential household produces an annual 6 tonnes of carbon emissions as they eat and go about their daily business.

To be fair, the majority of food-related carbon emissions are generated during the growth and processing phases of the food consumption cycle. Overall, meat does have a larger footprint than plant-based foods, but this doesn’t tell the whole story. Moving to an exclusively plant-based diet without looking at the implications would be unwise. While reducing meat consumption can have a positive effect on the environment, blanket veganism is not the silver bullet to end the climate crisis. The impact of fruit, vegetable and grain-based agriculture on the environment varies greatly by country and type of crop. Increased demand for certain plant-based ingredients can lead to accelerated deforestation and a marked decrease in soil quality.

Ultimately a balance needs to be struck between dietary variety and agricultural practices in order to promote sustainability across the food chain.

Transport options

The UK is inextricably dependent on fossil fuel to power local, national and international transportation links that underpin much of our domestic economy. While electric vehicle adoption is on the rise, there is still a ways to go to bring greener transport methods to the fore.

It should be noted that the growing influx of air travellers coming through UK airports also contributes to our carbon emissions. To counter this, the UK government needs to aggressively incentivise electric vehicle uptake especially as car ownership is dwindling for younger generations. This should happen in addition to the concerted push for more extensive and greener public transit options.

Does carbon offset actually work?

The earliest carbon offset initiatives centred around replanting trees as a way to counterbalance carbon emissions. Pundits such as George Monbiot issued pointed critiques at these early carbon offset schemes, describing them as little more than bribes to wash away our environmental guilt.

Since then, however, carbon offset schemes have evolved to support renewable energy projects such as:

1. Wind turbines in countries India to replace coal power stations.
2. Replacing cooking appliances with more efficient models.
3. Building greenhouse gas recovery systems for large landfill sites.

These projects have tangible environmental benefits when it comes to reducing carbon emissions. Additionally, their results are verified by independent audit organisations such as Verified Carbon Standard (VCS).

There are also claims that carbon offset schemes are nothing more than excuses to allow participants to carry on polluting without concern. Overwhelmingly, this has proven not to be the case because carbon offset participants are very aware of their own environmental impact from the outset.

Personal environmental considerations aside, the effectiveness of carbon offsetting ultimately comes down to how much the projects being funded can reduce carbon emissions.

The net environmental impact of a carbon offsetting project is defined by whether emissions savings are in addition to any planned developments that would have led to a gradual reduction in greenhouse gases without additional involvement.

To help determine this, there are two main certification standards:

1. Voluntary Gold Standard: This program uses the Kyoto Protocol as a framework to audit the effectiveness of a carbon offset initiative.
2. Voluntary Carbon Standard: This program aims to offer rigorous evaluation but without some of the overwrought bureaucratic overhead of the previously mentioned standard.

What is an example of a carbon offset?

Let’s take a look at what constitutes a meaningful and successful carbon offsetting initiative. Not all projects are created equal, so it’s worth understanding the differences. We're actually going to look at three:

Gandhi Wind Farm project

The Gandhi project is centered around building an extensive wind farm in Porbandar, India - Gandhi's birthplace. With over 50% of India’s electricity coming from coal-fired power stations, there’s a significant potential to lower pollution by switching over to greener forms of energy generation.

Wind energy is a great alternative to coal when it comes to generating electricity. In environmental terms, wind farms put out 96 to 98% less carbon emissions than coal-based power plants.

This project aims to operate 21 wind turbines to generate 36GWh per year which will result in a carbon emissions reduction of 33 000 tonnes a year. That is roughly equivalent to the carbon emissions amount generated by 2000 UK households every year.

By funding the Gandhi project, carbon offset participants are bringing about a very real reduction in carbon emissions, not just for right now but also for the decades ahead. By helping countries around the world, verified carbon offset projects accelerate the transition to sustainable energy and with it, all its long lasting advantages.

In addition to the obvious environmental benefits, this project brings some fairly significant social impact to the table:

1. Creating or supporting 80 local schools
2. Providing food aid to almost a thousand recipients
3. Improvements to the electricity grid

Vietnam Biogas Project

Good Energy, a UK green energy provider, is offsetting most of the gas its customers use by taking part in a project that aims to give Vietnamese communities access to cleaner and cheaper power.

Vietnam’s economy is heavily dependent on fossil fuel, which creates both a pollution and carbon emissions problem that can only worsen as the economy grows.

For example, Vietnam’s agricultural industry is largely based on millions of small farms dotted all over the countryside. This means that the country’s rice, beef, pork and chicken production produces elevated amounts of methane. In the past twenty years, carbon emissions are estimated to have risen ten-fold. This means that Vietnam generates three times more carbon emissions than other comparable countries.

In order to counteract the global warming effects of methane, this project fosters the intelligent use of agricultural waste to provide energy for home heating, lighting and cooking.

By building household scale organic matter digesters, farmers can easily capture the methane gas that emanates from decomposing agricultural byproducts and turn it into biogas, a fuel that can meet their energy needs at an individual level.

At the same time, because the methane is no longer just released into the air and directly contributing to global warming, it can now be reused and burned which makes it both sustainable and environmentally friendly.

Participating farms also become much more self-reliant on the energy front, which greatly improves the day to day of these agricultural small holdings.

By funding this initiative, a Briton concerned by their own carbon footprint can help to reduce methane emissions globally. This has a significant environmental impact, especially when you consider that methane is a primary culprit for climate change. It is estimated that methane is twenty times worse than carbon dioxide in terms of global warming potential.

Vietnam carbon offset success: the numbers

This project has already demonstrated its environmental potential thanks to some very impressive metrics.

1. 3 600 000 tonnes of carbon emissions prevented until now
2. A reduction of 8 tonnes of carbon emissions per participating farm
3. The project has trained and employed over 2000 people so far.
4. The biogas generated by the digesters saves 6kg of firewood
5. A byproduct of biogas production is fertiliser which can be used by the farmers

Indonesia Geothermal Project

The Wayang Windu Phase 2 project aims to expand an existing geothermal power plant providing an additional 117MW to the Indonesian national grid.

Geothermal power stations generate electricity by harnessing the high temperatures locked in rock formations deep underground. Essentially, these hot rock seams are used as a furnace to turn water into steam, which can then be used to drive turbines that produce electricity.

The expansion of this geothermal power facility ensures that Indonesia’s reliance on fossil fuels and nuclear can be diminished. Just like wind power, geothermal power is a source of renewable energy.

While building costs are relatively high, though not as high as nuclear energy, a geothermal power plant can generally recoup most of the building costs within ten years of starting operations.

This plant extension can offset almost 40 tonnes of greenhouse gas per hour, which is almost a given considering the excellent reliability of geothermal power stations.