Earth, as we see it, is changing every day. The population is increasing at an alarming rate. The limited reserve of natural resources is depleting to a bare minimum. A large fraction of the biodiversity around is already getting threatened, and so on. We inhabit the planet at a time when the impact of climate change is harshly visible. 

The repercussions of global warming have brought about a disturbing imbalance in the ecosystem, for instance, increased forest fires, melting of glaciers, and the vulnerability to storms. Every individual from across the world has witnessed the impact in one way or another. There is a pressing need to decelerate the change before the planet gets exhausted. 

At such a time, the estimate of carbon footprint brings about a conscious understanding of the global impact of one’s daily tasks. The term refers to the amount of carbon emission through a personal or community action. All our products and services of different scales account for it. Thus, to counter the large ecological footprint, an idea for carbon offsets is brought to light.

A Guide to Understanding Carbon Offsets - Sheet1
Carbon Footprint Calculator _ ©Tony Avelar / The Christian Science Monitor

What are Carbon Offsets?

As the name suggests, carbon offsets are a means of indirect response to one’s carbon footprint. The term got translated into a strategic method where one can buy carbon offsets. This process of carbon offsetting aids in funding projects that help in reducing global carbon emissions. The simple concept came up to encourage the use of renewable energy. In addition, it is a solution for large corporations that can not cut down on their carbon footprint beyond a limit. 

For instance, airline companies or the ocean shipping industry have limited alternatives. Hence, investing in carbon offsets proves as a method for them to make up for their carbon emissions. The funds gained can then be used to support environmental projects that can not secure the funding on their own. 

A Guide to Understanding Carbon Offsets - Sheet2
Mitigating the High Emissions by Airline Companies _ © Tyler Varsell /

The idea of carbon credits, if used correctly, can change the world. They may have the potential to negate the detrimental effects of global warming.

An example of the wind power project in Costa Rica gives an insight into the ground-breaking impact of carbon offsets. The country had an ambitious goal of becoming carbon neutral by 2021, yet the resources to achieve it were non-existent. However, as the project qualified for emission reduction credits, the bank agreed to provide the loan. The project would then additionally receive funding from carbon offsets. Today, the wind farm has a capacity of 12.75MW, producing a tremendous amount of power. The project successfully cuts down 15,000 tons of carbon emissions annually!

A Guide to Understanding Carbon Offsets - Sheet3
Wind Farms at Costa Rica _ ©

Benefits of Carbon Offsets

Carbon offsets are advantageous to both ends in the market. While the funding aids the construction of a new project, the businesses investing in them get a reduced carbon footprint themselves. Several projects for renewable energy, such as wind farms in Costa Rica, have gained funding from this concept. Moreover, projects providing access to efficient cookstoves in rural areas, production of biogas, or regeneration of degraded forests get the head start they require. 

On the other hand, the investors also get recognized for being eco-conscious. They gain credibility for calling themselves carbon-neutral, thus making them a superior choice for customers. Some companies invest voluntarily to improve their public image, while others are compelled to comply with local standards. It helps the regulators enforce the environmental policies in return for better incentives.

A Guide to Understanding Carbon Offsets - Sheet4
Biogas Program in India funded by the UN certified Clean Development Mechanism (CDM) _ © Ram Esteves

The Negative Side of Carbon Offsets

The concept, while being popularly recognized as a boon, received much criticism as well. Several argued that it was a way for wealthy companies to buy their way out instead of taking direct responsibility for their actions. At the same time, the traction for the concept has also led to more bold actions, like the imposition of a carbon tax, taking the backseat. In addition, the non-transparency in consumption of carbon credits and the incurrence of significant certification costs lead to a dislike for the idea of investing in carbon offsets. 

Investigations that delve deep into the subject have found that the buyers are investing in projects that are never completed. Surprisingly, some were never on the path to be executed. Many even think that the need for carbon credits in most of the projects is exaggerated! Hence, it would help create a ripe market for fraud and a platform for failed promises. 

Carbon Footprint Calculator – On the Go _ ©Dave Rouse / Carbon Click

Carbon offsetting is becoming increasingly familiar among large corporations. However, the credits are rarely ever bought by individuals. Most often, people do not understand the carbon impact of their day-to-day purchases. Hence, several upcoming carbon offset programs focus on bringing the idea to individuals. They organize online tools that aid people in calculating their carbon footprint while sitting at home. Yet, the most fundamental aspect of the concept comes down to ethics and morals. 

Investing in carbon offsets can not be loosely translated into having the freedom to consume more energy and emit large amounts of carbon! It is only a method to negate consumption that one can not avoid. Eventually, carbon offsets may not be enough! Global development and the subsequent demand for resources are only growing in the 21st century. The idea, however, is gripping. If implemented with credibility and reliance, it can engage consumers in behavioural change. It gives one of the many answers to the big question. “How can we contribute to the mitigation of climate change?”


An architecture student who finds architecture to be a continuous process of pushing boundaries, to make the world grow around and about it. She strives to read and understand the dialogue that occurs between architecture and the lives of people connected to it.