What is a Carbon Offset?

In order to understand the concept behind carbon offsetting, please watch our short film; it only takes a minute.

In a nutshell, a carbon offset or credit is a unit (tonne) of carbon that is saved or sequestered by a project that is then sold to an emitter of carbon to balance out a tonne of their emissions. It is important to note that RECs (Renewable Energy Certificates) are NOT carbon offsets. In summary, this is because all carbon offsets must be: -

real;

measurable;

additional;

permanent and

verifiable.

RECs fail the additionality and measurability tests. For more information, read Michael Gillenwater’s (Princeton University) excellent discussion paper on the subject http://www.princeton.edu/~mgillenw/REC-OffsetPaper-PartI_v2.pdf This clearly sets out that: -

“Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificate (RECs). Should consumers buy RECs or emission offsets? After examining this question, the author concludes that RECs are not equivalent to emission offset credits, and as currently defined, the retiring of a REC may have no impact on emissions from electric power generation. Consumers that purchase RECs in voluntary green power markets are providing financial assistance to renewable generators in the form of a production subsidy. Generators that sell RECs are not transferring emission reductions, since they are unlikely to have ownership or the ability to quantify reductions using a commonly accepted standard. More importantly, RECs currently sold in voluntary markets do not pass credible additionality tests and can, at best, be expected to have a market demand effect, which will be less than the supply of RECs on the market.”

In short, if you are looking to offset your carbon emissions, this cannot be done using RECs. It should be done using high quality carbon credits such as those developed and sold by co2balance in accordance with the five tests listed above.