Carbon offsets

Topic Selected: Climate Change

General Article icon Type: General Article

What is a carbon offset?

A carbon offset is a credit for greenhouse gas reductions achieved by one party that can be purchased and used to compensate (offset) the emissions of another party. Carbon offsets are typically measured in tonnes of CO2-equivalents (or CO2e) and are bought and sold through a number of international brokers, online retailers and trading platforms.

For example, wind energy companies often sell carbon offsets. The wind energy company benefits because the carbon offsets it sells make such projects more economically viable. The buyers of the offsets benefit because they can claim that their purchase resulted in new non-polluting energy, which they can use to mitigate their own greenhouse gas emissions. The buyers may also save money as it may be less expensive for them to purchase offsets than to eliminate their own emissions.

Many types of activities can generate carbon offsets. Renewable energy such as the wind farm example above, or

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