- Find out how carbon offsetting schemes work
- How to choose a carbon offsetting scheme
- Things to watch out for
- Tips on how to reduce your carbon footprint
Carbon offsetting schemes
Carbon dioxide (CO2) is produced when fossil fuels (oil, natural gas and coal) are burnt to make energy. It contributes to climate change.
There’s a growing number of companies offering to ease your conscience by ‘offsetting’ some, or all, of the carbon emissions you can’t avoid by changing your lifestyle. You give these companies money and they invest it in projects that claim either to remove an equivalent amount of CO2 from the atmosphere or to prevent that CO2 from being created.
Choosing a carbon offsetting scheme
The best way to lower your carbon footprint is to avoid emissions in the first place. For example, by walking or cycling instead of driving short distances, buying more energy efficient appliances or installing energy saving light bulbs.
If you decide to pay to offset, choose a company that offers the type of projects you want to give money to and gives details on where your money goes.
There are many different types of offsetting scheme, each supporting different projects:
Buying and cancelling industrial carbon emission trading permits
The European Carbon Trading System is designed to reduce carbon emissions from businesses. Under the scheme, governments put a price on the amount of greenhouse gases that can be emitted by any company.
Companies are issued emission permits and are required to hold an equivalent number of allowances (credits), which represent the right to emit a specific amount. Companies that need to increase their allowance must buy credits from those who are willing to sell.
Some carbon offsetting schemes work by buying and cancelling these emissions credits, stopping the equivalent emissions being produced, while also driving up the price of the remaining permits for polluting companies, making damaging activities less economically attractive.
Investment in Kyoto Protocol-compliant, fully verified projects (known as CERs)
Money paid to a carbon offsetting scheme goes to wind power and methane-capture projects, often in the developing world.
‘Voluntary’ schemes (known as VERs)
These can have a prominent social aspect, such as African community projects, or can be UK projects such as tree planting. These tend to be cheaper because of the reduced administrative and verification burden, and can often bring additional benefits such as social and economic help to deprived communities.
However, tree planting in particular is a highly contentious issue in the offset sector. Its long-term capacity to remove carbon dioxide from the atmosphere has been heavily disputed, as the gas can be released again when the wood later rots or is burnt. Such schemes, while having wider environmental benefits such as encouraging wildlife and preventing soil erosion, also make it less easy to measure and track the exact amounts of carbon dioxide removed or prevented.
Things to watch out for with carbon offsetting schemes
The costs and the level of information provided by carbon offsetting schemes can vary widely between providers.
When choosing a carbon offsetting scheme we advise you to do the following:
- ask where your money actually goes
- find out how much of your payment goes on administration fees and company profits
- compare cost per tonne of carbon for different schemes
- end up funding a project you are happy giving your money to.
Do remember, though, that it will always be cheaper to avoid and reduce carbon emissions in the first place. You can get tips and advice on how to cut energy costs and run an energy-saving home in our guide.