Climate change has rendered effective methods of climate action a necessity in most sectors of public and private life. With every passing day, individuals and organizations alike, are being motivated, encouraged, or pushed to adopt sustainable practices and participate in strengthening the green economy. More and more civil society groups and citizen collectives are now dedicated to the global problem of global warming and climate justice. Today, it is not an anomaly for a big business with several years of established practices to transform and adapt to the growing needs of a world experiencing incrementally worsening climate change.

There are many ways for individual citizens and big businesses to act for climate justice: the foundational starting point that is generally espoused is to start by reducing one’s greenhouse gas emissions or GHG emissions. In reducing one’s GHG emissions, the stakeholders often have to cut back on certain high GHG emission-creating activities, or maybe even cut said activities out completely. For an individual citizen, this may include taking public transport over personal vehicles for short-distance traveling, buying eco-friendly products, switching to green practices like composting or recycling, etc. For businesses, cutting back on emissions has to be on a far wider scale, such as, running their factories or offices from renewable energy, cutting back on fossil fuel usage, reducing wastage of energy, etc.

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Oftentimes, engaging in these ‘green’ activities alone can make it difficult for businesses and individuals to reduce their GHG emissions, and this is where the concept of ‘carbon offsetting’ can prove to be very beneficial.

What is Carbon Offsetting?

To put it simply, carbon offsetting is an indirect way to reduce or remove one’s quota of greenhouse gas emissions from the atmosphere. The actual practice of it includes an individual or organization buying “carbon offsets” from a carbon offsetting company, and the money that is spent is used by that company to finance an activity that will reduce the amount of greenhouse gas emissions from the atmosphere, that the buyer paid for. In this way, one can essentially buy their greenhouse gas reductions, thereby offsetting their carbon offsets.

It is considered an indirect way to reduce carbon or other GHG emissions from the atmosphere because the person or entity buying the offsets is not exactly cutting back on their emissions but are paying money to buy carbon offsets – these carbon offsets remove or reduce carbon emissions from the atmosphere. Money one spends in buying carbon offsets could be used to finance renewable energy plants or reforestation efforts in severely deforested areas, etc.

Carbon offsets are an interesting, and increasingly common means to reach one’s net-zero emissions goals. There are two types of carbon offsets – voluntary and compliant.

Voluntary is when an individual or organization buys carbon offsets of their own volition, and they are not required to do so by any law or authority. Compliant carbon offsets are those which are lawfully mandated and obligatory for all parties under particular governance to purchase. An example of this is the EU Emission Trading Scheme, which is the first largest greenhouse gas emission trading scheme in the world, which sets a certain amount of carbon offsets that generally have to be bought by a particular company to follow the legally compulsory cap on the number of greenhouse gases they are allowed to emit each year. Voluntary carbon offsets are usually purchased by individuals seeking to do more to reduce their carbon footprint, whereas compliant carbon offsets are usually required for a business to meet its net-zero emissions goals.

The first carbon offsetting compliance market was established by the Kyoto Protocol’s Clean Development Mechanism, in which all countries or bodies party to the Kyoto Protocol agreed to greenhouse gas emissions targets, which were in part aided by carbon offsets bought by the first world or highly developed countries from underdeveloped or developing countries. The Kyoto Protocol reached its end in 2020 and was meant to be replaced by the Paris Agreement, which is still determining the role and general efficacy of carbon offsets.

The idea behind carbon offsets is to restore the balance in emissions that the individual or business threatens otherwise. If a company has high emissions, buying carbon offsets ensures that the amount of emissions they send out to the atmosphere is also reduced by another carbon offsetting activity. In this way, carbon offsetting is a compensatory mechanism in an increasingly climate-sensitive world.

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Which Companies Are Already Doing It?

As more and more organizations are being motivated to reduce their greenhouse gas emissions and mitigate their carbon footprint by increasingly climate-conscious consumers and employees, big-name companies are leading the way in the practice of carbon offsetting as one way to reduce their rate of emissions. Companies such as Amazon and Delta are already well-versed in the purchase of carbon offsets to reduce their greenhouse gas emissions.

Other multinational and international companies that are delving into the carbon offset market as a way to reach net-zero emission are Nestle, JetBlue, Disney, General Motors, Microsoft, Unilever, Royal Dutch Shell, etc. among others.

Net-zero emissions are reached when a body reduces the same amount of greenhouse gases that it emits into the atmosphere. Buying carbon offsets is a way for companies to do this without actually directly reducing their emissions by cutting back on polluting practices. Yet, they prove to be a good starting point for any entity, public or private, to get a head start on reducing their carbon footprint.

What Are the Benefits of Carbon Offsetting?

In the COP26 summit, countries, and delegations hoped to fine-tune and agree upon a basic structure for a global carbon market. This means that in the near future itself, carbon offsetting is solidifying as a mainstream method to reduce one’s carbon footprint. Apart from this legal functionality, it is generally considered an easy and viable starting point in the journey of becoming carbon neutral, and ultimately carbon negative.

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When one buys carbon offsets, the money is used to finance projects that reduce greenhouse gases emissions from the Earth’s atmosphere. This usually includes funding ventures for renewable energy such as solar power farms, hydroelectric power stations, wind turbines, etc. It could be used to bring clean technologies to developing countries or invest in sustainable businesses. In this way, buying carbon offsets does not just help in GHG emission reductions but can often lead to greater societal good.

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What Are Its Criticisms?

Despite its popularity and benefits, carbon offsetting is not free of criticism, and rightfully so. The key takeaway from carbon offsetting is that it is a brilliant mechanism to adopt and use when one is just starting in the emissions reduction journey. It cannot be viable as the sole practice a company or individual participates in to reduce their carbon footprint.

Carbon offsetting is an additional method to reducing one’s carbon footprint and is not its sole instrument to do so. Many climate experts are wary of carbon offsets and believe that the efficacy of certain types of carbon offsets is questionable. Furthermore, there are concerns that the money spent in purchasing carbon offsets is not entirely used in reducing emissions. Research carried out by Carbon Retirement and reported by The BBC found that “Less than 30 pence in every pound spent on some carbon offset schemes goes directly to projects designed to reduce emissions”.

Overall, a strict and enforceable governing structure is required for the practicable and truly beneficial use of carbon offsetting.


Ultimately, carbon offsetting is a beneficial tool to reduce greenhouse gas emissions and thereby mitigate one’s carbon footprint. It is a compensatory mechanism that allows businesses and individuals alike to purchase greenhouse gas reductions. Despite its novelty, and perhaps because of it, it is essential to understand that the practice of purchasing carbon credit under the carbon offset scheme should be an additional measure that emitting entities take to reduce their GHG emissions. If carbon offsets are the sole avenue through which one manages their carbon footprint, the negative implications are immense; carbon offset projects are not always foolproof and oftentimes do not reduce the amount of greenhouses gases that they set out to do so, making the purchase of carbon offsets a waste of money and resource.

If used in conjunction with other climate-conscious practices, carbon offsets can prove to be a worthy and contributing aspect of one’s carbon reduction plan. Proper research into carbon offset projects, purchasing from verified and ethical carbon offset brands, and supplementing carbon offsets with more immediate climate-positive activities will prove to be a productive and effective method to reduce greenhouse gas emissions from the atmosphere.

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  1. Tamanna May 28, 2022 at 1:06 pm - Reply


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