What is a Carbon Offset?

A carbon offset is a financial instrument that measures emission reductions or cleaning of the atmosphere. A carbon offset is also called a carbon credit. This emission reduction is measured in standard unit, which is one tonne of carbon dioxide gas, or equivalent, removed from atmosphere in one year. This is sometimes called a tCO₂e.

Is carbon dioxide the only gas responsible for global warming?

There are six (6) greenhouse gases responsible for global warming, and each has an associated global warming potential measured in terms of carbon dioxide. For example, 1 tonne of N₂O has the same impact as 310 tonnes of CO₂.

	Greenhouse Gas	Global Warming Potential (GWP)
	Carbon Dioxide (CO2)	1
	Methane (CH4)	21
	Nitrous Oxide (N2O)	310
	Sulphur Hexafluoride (HF6)	23,900
	Hexafluorocarbons (HFC)	140 to 11,700
	Perfluorocarbons (PFC)	6,500 to 9,200

[ GWP reference ]

What are Ecosystem Services?

Ecosystem services are the transformation of a set of natural assets (i.e. environmental attributes), such as soil, plants, animals, air and water into "services" that humans value. These services can include:

• provision of clean water;
• maintenance of liveable climates and atmospheres (carbon sequestration);
• pollination of crops and native vegetation;
• fulfilment of people's cultural, spiritual, intellectual needs; and,
• provision of options for the future, for example though the maintenance of biodiversity.

[ ecosystem services reference ]

Are there standards & rules regarding carbon offsets?

There are voluntary and compliance standards used in the development of carbon offset projects.

Voluntary standards include:

Climate Action Reserve (CAR);

Voluntary Carbon Standard (VCS)

Climate, Community, Biodiversity Standard (CCBA)

Chicago Climate Exchange (CCX)

Compliance standards include:

Alberta Offset System (ABOS)

European Union Emissions Trading System (EU-ETS)

If I have 1000 swine. If I cull them all, why doesn't that generate carbon credits?

It would eliminate the swine & the methane they would produce, but unless there is a specific protocol governing the activity, carbon credits may not be generated.

New protocols may be created, if one doesn't exist; however, all protocols must pass scientific & public review before they are accepted. Carbon credits are generated when an activity results in a change of behaviour or practice occurs beyond 'business-as-usual'.

Are carbon offsets just permission for certain companies to pollute?

Under greenhouse gas regulations large polluting entities are required to purchase official government offsets from people who are undertaking emission reduction activities. This means that polluters are paying a fee to people who are cleaning the atmosphere. This can be a very expensive activity and over time the price for offsets increases, which in turn sends a price signal to polluters encouraging them to invest in clean technology. So purchasing carbon offsets doesn't let polluters off the hook; in fact, it creates a revenue stream for the cleaning up the whole industry and encourages the development of clean technology & industrial processes.

How do we know carbon offsets are real?

A carbon offset represents an emission reduction, which is only “real,” and of high quality, if they are carefully documented and independently audited or verified. Under GHG regulations, governments review this information, certify the offsets, and then serialize each offset on a registry.

How is a carbon offset used or consumed?

A carbon offset is consumed when it is used to reduce an entity’s greenhouse gas pollution in a given year. Once the carbon offset is applied to an activity, it is delisted from the carbon registry and cannot be used again.

Is it possible to “bank” carbon offsets for future use?

If carbon offsets are purchased, and not used for emission reduction requirements, they can be banked. You may bank carbon credits as insurance for future use or as a hedge for expected future price increases.

How do you keep track of individual carbon offsets?

Each carbon offset is tied to the specific project that created it. Once created, individual offsets are serialized and placed on a registry. Offsets may be transferred between GHG registries, but must first be delisted before they can be transferred.

What is a Carbon Footprint?

A carbon footprint is the sum of all direct and indirect carbon dioxide emissions, which result from an entity's activities, usually measured over the span of a year.

What does Carbon Neutral mean?

Carbon neutrality means that an entity’s greenhouse gas emissions have been calculated (represented by a carbon footprint), and have been balanced by the purchase or application of an equal number of carbon credits. For a claim of neutrality to be real, the emissions footprint of a company should first be calculated and placed on an emissions registry such as The Climate Registry.

Are there official accounting rules for calculating carbon footprints for businesses?

Yes. The official, recognized standard is produced by the World Resources Institute (WRI) and is called “Greenhouse Gas Accounting & Reporting Protocol (version 3)”. The official rules are designated by the International Organization of Standardization (ISO) under the 14064 Protocol.

Why should we, in Canada, make reductions, if some other nations are increasing their pollution?

It is important to realize that much of the heavy polluting industries North America and Europe were outsourced to emerging nations over the past twenty years. In fact, these developing nations are now experiencing very high rates of population growth and economic expansion. So, Western nations, to some extent, have exported greenhouse gas pollution to developing countries. Nations in Europe and North America are still the main purchasers of consumer goods globally, so the question of who is responsible for the pollution is very complex. It is important that we, as Canadians, reduce our greenhouse pollution as much as possible and use our power as consumers to make green purchase choices for products that originate from overseas destinations.