What Is Carbon Offset

Inspire Clean Energy

16 min read

category: Clean Energy 101

Being eco-conscious isn’t something that’s just for “tree huggers” anymore – more and more people are choosing to make eco-friendly choices each day. There is plenty we can do on an individual basis, but we also need businesses to make better decisions if we’re going to see a dramatic change in the world. A phrase we’re hearing a lot of now is, “Carbon Offset.”

Carbon Offset Definition

The definition of “carbon offset” is a project or product a business or individual can pay for to benefit the environment when they do something that contributes to carbon emissions. For example, a business may pay for a new forest to be planted to offset the emissions from their delivery trucks and employee transport.

What is carbon offsetting and how does it work?

Carbon offsetting is when you (as an individual or business) do or pay for something that will produce more good for the environment than something that produced harmful emissions. We looked at a business example above, so let’s look at the example you or I could do.

Say you bought new clothes – what we don’t often realize is that there were emissions that were produced to create them and get them to you. To ensure the world is “rebalanced” from the harm your new clothes did to the environment, you can buy a carbon offset (or do carbon offsetting behavior) which will ensure environmentally friendly projects can move ahead or grow.

What does “carbon offsets” mean?

Carbon offsets is a term often used to describe something you buy that will go on to make positive changes for the environment. For example, if you live in an apartment in New York, you can’t head outside to plant a new tree every time an Amazon delivery turns up on your doorstep. You can, however, invest in a “carbon offset” which will ensure your money goes toward eco-friendly projects.

What is an example of a carbon offset?

Imagine you own a moving company – your trucks drive across the country every week helping people move from coast to coast. You know that your trucks are emitting harmful gases as they burn fuel to transport weighty furniture and possessions across thousands of miles. Instead of shrugging your shoulders and saying nothing can be done to change this, you can invest in a “carbon offset.”

The money you put toward your carbon offset then went on to ensure a new wind turbine could be built which would then produce emissions-free electricity for the grid.

Does carbon offsetting really work?

Yes and no. The issue here is that you can’t necessarily cancel one thing out with the other, as you’re still producing harmful emissions. In a best-case scenario, you wouldn’t have to do carbon offsetting. However, our infrastructure simply isn’t at a stage where we can all adopt the most eco-friendly practices. While Tesla has had success in building fully electric semis, they aren’t on our roads, nor will they be affordable for all when they are (at least at first). We’ve got to build the infrastructure first, and that takes an investment of cash.

Carbon offsetting is the next best thing to already having the most eco-friendly option. Instead of doing nothing, you can invest in something that will “cancel out” the emissions you produced.

How much CO2 does a tree offset?

A “typical” tree can offset around 46 pounds of CO2 each year, provided the tree is fully grown. Trees absorb CO2 and put out oxygen, so they are the perfect way to offset CO2 emissions.

One thing to note here is that a typical 5-seater vehicle emits around 4.6 metric tons of CO2 a year – that means we need around 48 full-grown trees for every standard car on the road, and more for trucks, semis, and a lot more for planes.

Which tree absorbs the most CO2?

Oak trees are the best tree for absorbing CO2, though horse-chestnut trees and black walnut trees follow closely. An oak tree takes 20 years to reach maturity. For this reason, we need to look to fast-growing plants to support the exchange of CO2.

How many trees does it take to offset carbon?

This varies depending on how much carbon is produced. As we saw in our example above, the average car requires 48 mature trees to offset a year’s worth of carbon. Your refrigerator, if powered by fossil fuels, produces around 256 pounds of carbon a year. That means you need around 5.5 mature trees to offset the average refrigerator.

One of the best ways to help offset your home’s carbon production is to make the switch to renewable energy. We can likely help you dramatically reduce your carbon footprint by fueling your home with 100% renewable energy, and some states have green options you can switch to. If you’d like to find out more about how we can help you, click here.

How many trees offset a person?

The average U.S. citizen has a carbon footprint of 16 tons per year – one of the highest in the world (the average being around 4 tons, and as a comparison to the U.S., the UK produces 12.7 tons on average). That means you may need a whopping 695 mature trees to offset your carbon emissions for a year. Multiply that by our current population which is around 330 million… and well, we don’t need to do the math to see that emissions in this country (and around the world) is a major problem.

Can I buy carbon offsets?

Yes, you can buy carbon offsets, whether you’re an individual or a business. There are non-profits and companies that offer “products” you can buy which will go toward worthwhile eco-friendly projects. You just need to ensure that any company or non-profit you choose to work with has the right certifications, otherwise, your money may not go to the right place.

Should I buy carbon offsets?

There’s definitely a time and a place where buying a carbon offset makes sense. For example, if you plan to fly for a vacation or have a gas-guzzling vehicle (or collection) you keep for the joy of it, then purchasing carbon offsets is a great idea, since there is no better option without making your quality of life worse.

However, if it’s a case of living mindfully versus throwing money at offsets so you can do as you please, then it’s likely not worth it. Making eco-conscious choices such as choosing a car with a high MPG (or even going electric), purchasing eco-friendly versions of products, and recycling, are all things you can do to reduce your carbon footprint.

Buying a carbon offset is never a bad idea, the best thing you can do for the planet is to use them in tandem with simply living with the environment in mind.

How much is a carbon offset?

It’s generally far more affordable than you might think. On one carbon offset site called Cool Effect, purchasing a carbon offset for a one-way 6-hour flight will only cost you around $3.30 - $13.18, depending on your choices.

Where does carbon offset money go?

When you purchase a carbon offset, the site you buy from will tell you about the projects they’re funding. For example, the aforementioned Cool Effect currently has projects within the U.S. and abroad that range from protecting grassland, wildlife, and forests to actively tree planting in countries like Kenya and restoring oceans. Each project has its own “cost per tonne,” so your offset costs will depend on the project you choose to fund.

How can I offset my carbon footprint?

Simply go to one of the certified carbon offsets and fund a project that is meaningful for you. You can find a list of Green-e certified carbon offsets, which will give you plenty of great options.

What are the best carbon offset programs?

Some of the best current (2021) offset programs are:

  • Cool Effect
  • Native Energy
  • TerraPass
  • Myclimate
  • Sustainable Travel International
  • 3Degrees (best for corporate)

How much does it cost to offset 1 ton of carbon?

One U.S. ton of carbon (2000lbs) would cost you around $8.79 to offset if you were to offset with Cool Effects Alto Mayo Protected Forest project. Projects are generally between $5 - $20 per tonne (2200lbs).

How does Inspire work to offset carbon?

We purchase 100% clean, renewable energy on behalf of our customers, essentially offsetting the emissions that would have been produced to power their home. That means that every time you pay your electricity bill through Inspire, you’re going a long way to drastically help reduce the amount of emissions produced to power U.S. homes. And, unlike when you carbon offset, those emissions won’t be produced on your behalf.

Inspire’s 100% clean energy plans are fully personalized based on your past energy usage and have a fixed monthly cost, so you won’t have any nasty surprises from month to month. If you’re interested in making the switch to 100% clean, renewable energy, click here.

Carbon offsetting isn’t the answer to all our emissions problems, but it does start to tackle the huge problem. Rather than causing more harm than good, you can offset your carbon-heavy activities by investing in projects that work to make the world a more eco-friendly and green place.

What are the environmental effects of increased carbon dioxide in our atmosphere?

Carbon dioxide, methane, and halocarbons are greenhouse gases that absorb and re-emit heat. Some of the re-emitted energy heats Earth's surface, which is needed to keep Earth at the right temperature. Too many greenhouse gases, however, would make Earth too hot to maintain life.

Rising CO2 levels warm the atmosphere, leading to higher temperatures and causing more evaporation, which results in  greater warming. When carbon dioxide levels decline, the planet cools, water vapor falls from the atmosphere, and global warming drops. 

When CO2 levels rise, air temperatures rise, and more water vapor evaporates, amplifying greenhouse heating. Carbon dioxide contributes less to the greenhouse effect than water vapor, although it is a temperature-setting gas. Carbon dioxide influences atmospheric water vapor and the greenhouse effect. 

What are some examples of carbon offsets?

The term “carbon offset” refers to any action that reduces carbon dioxide or other greenhouse gas emissions. Because greenhouse gases are pervasive throughout Earth's atmosphere, emission decreases help the climate wherever they occur. Essentially, carbon offsets help to create a carbon-neutral state instead of adding or detracting from the carbon.

The term “offset” has been used since the late 1970s as part of the U.S. Clean Air Act, which only authorized additional emissions in high-pollution areas if other reductions occurred to counteract the increases. However, carbon offsets became popular in the first decade of the 21st century as worry about CO2 grew.

Here are a few examples of carbon offsets:

  • Constructing wind farms to replace coal-fired power stations
  • Increasing building insulation to decrease heat loss
  •  Creating more energy-efficient cars for transportation 
  • Planting trees, which sequester carbon in soils or forests

How much does it cost to offset 1 ton of CO2?

Different sorts of offset projects will unavoidably have different costs—especially since projects may be chosen for their broader social benefits as well as their CO2 impacts. Carbon offsets refer to when businesses compensate for their own emissions by purchasing credits issued by emission reduction projects.

The price of carbon offsets is currently unsustainably low due to a credit excess on the voluntary offset market that has built up over time. The cost of offsetting corporate carbon emissions is predicted to increase tenfold over the next decade as more organizations adopt net-zero ambitions, with carbon credit prices expected to reach between $20 and $50 per metric ton of CO2 by 2030. 

Carbon offset prices are currently hovering between $3 and $5 per metric ton of CO2. Experts believe this price point is far below the level required to unlock significant investment in emissions-mitigation measures such as carbon removal technologies or large-scale nature-based solution projects as well as provide companies with an additional financial incentive to reduce their own emissions and avoid the need to purchase offset credits.

What is the difference between a carbon credit and a carbon offset?

Carbon credits and carbon offsets are both accounting procedures. They provide a means of balancing the pollution scales. Because CO2 is the same gas everywhere on the planet, the main premise underlying credits and offsets is that it does not matter where emissions are decreased. Therefore, it makes economic sense for both consumers and businesses to decrease emissions wherever it is cheapest and easiest, even if it does not involve their own activities.

While the phrases “carbon credit” and “carbon offset” are frequently used interchangeably, they relate to two separate products with two unique goals. “Carbon offset” refers to removing greenhouse gases (GHGs) from the atmosphere. Meanwhile, carbon credits are a reduction in the number of greenhouse gases (GHGs) discharged into the atmosphere. In other words, carbon credits represent the right to emit a specific quantity of carbon. In contrast, carbon offsets represent the creation of a specific amount of sustainable energy to offset the usage of fossil fuels.

Where does carbon offset money go?

Carbon offsets are mainly carried out in developed countries and are divided into the following categories: 

  • Forest Reforestation - This method attempts to reduce deforestation and aid in absorbing massive amounts of CO2 from the atmosphere. Forestation is common in developing countries, and it might involve the planting of hundreds or even millions of trees at once. 
  • Reducing Deforestation and Forest Degradation Emissions (REDD) - REDD is a framework for creating financial incentives to minimize deforestation and degradation and encourage long-term management. Firms or private sectors pay countries not to cut down their forests in exchange for their carbon credits. 
  • Access to Safe Drinking Water - Far too many countries are without accessible or clean drinking water. One of the goals of carbon offsetting is to help developing countries access clean water, which helps them to live and engage in commerce. 
  • Wind Turbines - Wind turbines can take the place of fossil-fueled power plants, saving massive amounts of CO2. Wind turbines can also earn carbon credits for the decrease in emissions they produce. These carbon credits can offset your emissions once they have been certified. 
  • Investing in Renewable Energy - The most effective means of carbon offsetting is to directly finance renewable energy to minimize demand for fossil fuels. Renewable energy facilities are also guaranteed to last a long time and reduce emissions in a significant way.

What is carbon sequestration, and why is it important?

Carbon sequestration is the process of storing carbon dioxide to prevent it from entering the atmosphere. The goal is to keep carbon stable so it does not warm the atmosphere. The method has a lot of promise for lowering individuals' carbon footprint.

This activity is critical in the fight against the greenhouse effect, which is generated by an excess of carbon dioxide in the atmosphere due to fossil fuel combustion and deforestation, among other damaging human activities. Carbon sequestration can be divided into technological, biological, and geological categories.

Technological sequestration explores ways to remove and store carbon from the atmosphere and new ways of utilizing carbon dioxide instead of removal. Biological sequestration plans to store carbon dioxide in forests, grasslands, soil, and oceans. Geological sequestration works to store carbon dioxide underground in geological or rock formations. 

How can individuals offset their carbon footprint?

Corporations are not alone in wanting to reduce their carbon footprint; individuals can help in many different ways. Take a look:

Transportation
  • When possible, walk, utilize public transportation, carpool, or bike. It also decreases traffic congestion. 
  • Avoid needless braking and acceleration when driving. Studies show that aggressive driving can increase fuel usage by 40 percent. 
  • Maintain your automobile to enhance fuel efficiency.
  • Combine errands to reduce driving. Have one errand day per week.
  • Consider a hybrid or electric automobile if you are buying a new car.
Air Travel 
  • Drive instead of flying when possible, as driving may produce fewer greenhouse emissions than flying for shorter journeys. 
  • Opt for nonstop flights to save fuel and reduce pollution if you have to fly. 
  • Fly coach, as first-class can result in nine times greater carbon emissions than economy.
Home
  • Get an energy audit for your home. This shows how you use or waste energy and helps you be more efficient. 
  • Replace incandescent light bulbs with LEDs, which utilize 25 percent less energy and last 25 times longer.
  • Turn off lights and disconnect electronics when not in use. 
  • Monitor and maintain your air-conditioning and water heater.
  • Install a low-flow showerhead, which can save 350 pounds of CO2. Shorter showers help, too. 
Shopping
  • Buy fewer new items and shop secondhand when possible.
  • Shop with reusable bags. 
  • Avoid overpackaged products. 
  • If you need a new computer, get a laptop. Laptops are more energy-efficient than PCs. 
  • Look for Energy Star items when buying appliances, lighting, office equipment, or gadgets. 
  • Buy from green companies.
Clothing 
  • Avoid buying cheap, trendy clothing, as it ends up overfilling landfills and producing methane. Instead, buy durable clothes
  • Shop at consignment shops for vintage or repurposed clothes. 
  • Wash and dry clothes in cold water or low heat. Enzymes in cold water detergent clean better. Doing two loads of laundry weekly in cold water saves 500 pounds of CO2 per year.
Food 
  • Focus on buying ingredients instead of prepared food. Fruits, vegetables, and grains are healthier, but they are also better for the environment. 
  • Choose organic, seasonal foods. Transporting food from far away demands fossil fuels for fuel and cooling to prevent spoilage. 
  • Buy in bulk with reusable containers. 
  • Plan meals ahead, freeze extras, and repurpose leftovers to reduce food waste. 
  • Compost food waste.

Are carbon offsets the best way to fight climate change?

Carbon offsets look simple, but their effectiveness in preventing climate change is debatable at the moment. Carbon dioxide extraction to offset emissions is still in its infancy and cannot save the planet from global warming…yet. 

Education may be the best method of fighting climate change. People may not realize they can make a difference themselves or leave a healthier planet for new generations. Many companies are not aware of how their actions affect the planet, either, and spreading the news helps make everyone in the world part of the fight against climate change.

Don't worry about climate change— do something about it.

Our clean energy plans are the easiest way to reduce your home's carbon footprint.

Switch to clean energy
Share this article

Inspire Clean Energy

We're on a mission to transform the way people access clean energy and accelerate a net-zero carbon future.

Learn more about Inspire →

Together we can power a greener future

Get renewable today

Get the latest climate news and insights from Inspire direct to your inbox.

© 2023 Inspire. All rights reserved.