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What are carbon offsets and how do they work

The definition of carbon offsets is a reduction in the emission of greenhouse gasses, especially carbon dioxide, made to reduce the impact of emissions in other places. Simply put, this means that you create something that absorbs greenhouse gasses in equal amounts that they are released.

The result of carbon offsets is that you lessen your overall negative impact on the global environment by also creating positive effects. Carbon offsets are a way of keeping the economy stable while still improving sustainability.

Banning emissions of greenhouse gasses would disrupt today’s industry and thereby creating economic chaos. Some of the projects funded by carbon offsets are research projects on renewable energy sources which would help reduce the emissions in the future.

What kind of projects are included in the carbon offset programs?

More than 200 types of projects that offset greenhouse gas emissions are included in the carbon offset programs. Among these, you can find projects for
  • renewable energy
  • methane collection and combustion
  • destruction of industrial pollutants
  • land use
  • forestry
  • change of land-use.

The carbon offset markets

There are two markets for carbon offsets. One is the compliance market where governments and companies buy the carbon offsets that they need in order to meet caps that they have taken upon themselves to comply with. The other market is the voluntary market, where governments, companies, and individuals buy carbon offsets to mitigate their emissions of greenhouse gasses. The voluntary market is much smaller than the compliance market.

Commons questions

There are many questions about carbon offsets. We answer some of the most common ones below.

    • Carbon offsets definition?

    Carbon offsets are defined as a reduction of greenhouse gasses made to reduce the impact of emissions elsewhere.

      • How much carbon does a tree offset?

      The exact amount of carbon dioxide one single tree offsets depends a bit on how you calculate, but one figure that seems fairly common in the literature is that one tree offsets 0.16 tonnes CO2.

        • How to buy carbon offsets?

        Carbon offsets are traded on markets both the US and in Europe. There are several actors offering carbon offsets to both markets.

          • How to sell carbon offsets?

          Selling carbon offsets are also done on the aforementioned markets.Contact one of the actors to negotiate the deal.

          • How effective are carbon offsets?

          There has been a lot of discussion about how effective the carbon offsets are. The intention of offsets is good, but the implementation leaves room for improvement.

          • What is carbon offset shipping?

          Carbon offset shipping is exactly what it seems - all emissions from shipping your goods are offset by the shipping company. Normally this alternative comes with an extra cost to cover the carbon offset.

          • What is a carbon offset flight?

          Carbon offset flight is when you buy carbon offsets covering the amount of greenhouse gas emissions from your flight. This can be done either directly from some airlines or via an operator on the carbon offset markets.

          • What is carbon offset paper?

          Carbon offset paper is paper where all carbon emissions from the manufacturing have been offset.

          • Why buy carbon offsets?

          The reason for buying carbon offsets is simple - we all have to take care of our global environment. By buying carbon offsets you make positive impacts to match the negative impacts elsewhere.

          • What is the carbon offsets gold standard?

          The Gold Standard is a standard and certification mark for actors on the voluntary carbon offset market. It is handled by a non-profit foundation and acts to ensure that the activities and projects undertaken to offset carbon emissions do have the effect that they claim they have.

          Are carbon offsets a good idea?

          The discussion on whether carbon offsets are a good idea is ongoing. There are valid arguments on both sides, and no final conclusion has been reached. The positive side states that offsets are better than nothing and that they contribute to improving the environment. If carbon offsets are combined with other actions to reduce the carbon footprint, they are a great way of helping the environment in the long run. By using the carbon offsets for funding research projects on renewable energy sources, future emissions can be reduced.

          The critics claim that carbon offsets are only indulgences with no real effect and that actual cuts in the emissions must have precedence. Their view is that buying carbon offsets is easier than changing the emission behaviors and thereby it is preventing real changes to be implemented.

          Want to find out how to reduce your carbon footprint? Read how you can reduce Co2 emissions in 5 easy steps. If everyone does just a little and make more conscious decisions we've come a far way. 

          The Kyoto Protocol

          The Kyoto Protocol is an international treaty from 1997. It regulates the emission of greenhouse gasses, and it entered into force in 2005. 192 countries take part in the treaty. The main goal of the treaty is to make reductions to the emissions of greenhouse gasses based on the economic reality and capacity to make reductions on the participating countries.


          Combing carbon offsets and other ways of reducing your carbon footprint will help the global environment. By choosing carbon offset products, shipping, and transportation, you will both make a positive impact on the Earth and make a statement that you care about our planet. If enough people make the same choice, even large companies and industries will understand what kind of products their clients want and adjust their production.