The Carbon Border Adjustment Mechanism (CBAM)
11 min
Level
In this article we’ll explore what the CBAM is, why it’s been created, and what importers need to know ahead of its introduction.
The voice of impact
ESG / CSR
Industries
Ecology
Greenly solutions
US
US
Top 5 Carbon Offset Projects
Level
In today's world, increasingly focused on environmental responsibility, carbon offsetting is seen as a useful strategy for both individuals and organizations who want to reduce their carbon footprint. This strategy involves a commitment to projects specifically designed to reduce or eliminate carbon emissions, helping to create a greener future.
With an ever-expanding carbon offset market, the initiatives are increasingly diverse and impactful, ranging from reforestation efforts to advanced renewable energy technologies. Join us as we explore the top five carbon offset projects that are not only leading the charge in ecological preservation but are also reshaping our approach to sustainable living.
What are carbon offsets? How do they contribute to the fight against climate change? And should your company be investing in them?
Carbon offset meaning
First up, let's define what the term 'carbon offset' actually means. In a nutshell, a carbon offset is a way to compensate for emissions by funding an equivalent carbon dioxide saving elsewhere.
It's a method used by individuals and businesses to balance out their carbon footprints. This involves investing in environmental projects around the world that reduce future emissions or absorb carbon dioxide already in the atmosphere. These projects can range from renewable energy initiatives to reforestation efforts. The goal is to create a net zero carbon footprint by offsetting the amount of carbon dioxide (or carbon dioxide equivalent) one produces with an equal amount of reduction or removal elsewhere.
Learn more about carbon offsets in our blog.
Carbon offset vs carbon credit
Carbon credit
A carbon offset credit represents an emission reduction of 1 metric ton of carbon dioxide. The goal of carbon offsetting is to reduce all or a portion of a carbon footprint. They are typically used in regulatory or compliance markets, where governments or regulatory bodies set a cap on the amount of carbon dioxide that can be emitted. Companies are allocated or can purchase a certain number of credits, each representing the right to emit a specific amount of carbon dioxide. If a company emits less than its allowance, it can sell its excess credits to another company that is over its limit.
Find out more about carbon credits in our dedicated article.
Carbon offset
On the other hand, a carbon offset more broadly refers to a reduction in greenhouse gas (GHG) emissions – or an increase in carbon storage – that is used to compensate for emissions that occur elsewhere. Carbon offsets are more commonly associated with the voluntary carbon market. Individuals or companies purchase offsets to mitigate their own carbon emissions, often as part of their sustainability goals.
While both mechanisms aim to reduce overall carbon emissions, carbon credits are often part of a mandatory, regulated system, whereas carbon offsets are typically voluntary actions taken to achieve carbon neutrality or positive environmental impact.
Close
How does carbon offsetting work?
The principle of carbon offsetting lies in the idea of balancing out greenhouse gas emissions by funding projects that reduce or remove an equivalent amount of carbon from the atmosphere. The process begins with the measurement of the amount of carbon emissions produced by an individual or an organization. Once this carbon footprint is quantified, the equivalent amount of emissions can be offset through various environmental projects.
These projects might include renewable energy initiatives like wind or solar power, reforestation efforts, or even investing in technology that captures carbon directly from the air. The key is that for every ton of carbon emitted, an equivalent ton must be removed or prevented elsewhere. This approach allows individuals and companies to take responsibility for their environmental impact in a proactive manner, while also helping to reduce global emissions.
By investing in these carbon offset credits, not only do you compensate for your own emissions, but you also support sustainable practices and innovations that contribute to a broader environmental benefit.
While carbon offsetting is a valuable tool in the fight against climate change, it's important to remember it complements, rather than replaces, the need for direct emission reductions.
To learn more about how carbon offsetting and removal works why not read our article.
Does carbon offsetting reduce carbon emissions?
The role of carbon offsetting in reducing carbon emissions is complex. Carbon offsets work by counterbalancing emissions that have already occurred. They are a reactive measure, allowing individuals and organizations to invest in environmental projects that reduce or absorb carbon dioxide, effectively balancing out their own emissions. However, it's crucial to note that while offsets can compensate for emissions, they don't directly prevent them.
The effectiveness of carbon offsetting in reducing overall carbon emissions depends largely on the nature and execution of the projects funded. For example, investing in renewable energy projects or reforestation can have a long-term positive impact on the environment. These projects can contribute to a decrease in future emissions or increase carbon sequestration, which is beneficial for the environment.
However, it's important to recognize that carbon offsetting is not a cure-all solution. The ideal approach to tackling climate change is a combination of reducing emissions at the source and offsetting the remaining, unavoidable, emissions. In other words, while carbon offsets are valuable, they are most effective when used as part of a broader strategy that includes direct actions to reduce emissions. This might involve adopting cleaner technologies, enhancing energy efficiency, or changing business practices and lifestyles to be more sustainable.
“ Carbon offsets are a meaningful step towards mitigating climate change, but they should be viewed as part of a larger, multi-pronged approach to environmental sustainability. True progress requires both preventive measures to reduce emissions and reactive measures like carbon offsetting to deal with emissions that are unavoidable. ”
Carbon offset pros and cons
Pros of carbon offset
Undoubtedly, carbon offsets can have a positive impact on the environment and society. They fund projects that aim to reduce greenhouse gas emissions, like renewable energy initiatives, reforestation, and efforts to improve energy efficiency - especially in underprivileged communities. These projects not only help to balance carbon emissions but also often bring additional benefits like biodiversity conservation, improved air quality, and socio-economic development in developing countries. By investing in carbon offsets, organizations can demonstrate their commitment to environmental responsibility and sustainable development.
Cons of carbon offset
However, there are limitations to what carbon offsets can achieve. One of the primary concerns is that they can create a sense of complacency. For example, a company might continue environmentally harmful practices while relying on offsets to balance their emissions, rather than taking direct action to reduce their carbon footprint. The issue is that carbon offsets don’t address the root cause of the problem - i.e. the ongoing emission of greenhouse gases.
Moreover, the effectiveness of carbon offsets depends on the quality and longevity of the projects they fund. There's a risk that some offset projects may not deliver the long-term environmental benefits they promise.
Take the example of a tech giant like Apple. Apple continues to release new versions of the iPhone or Macbook annually, even if the technological modifications are minor and mainly for aesthetic purposes.
The iPhone doesn’t change that much each year, but consumers want the newest thing and so Apple products remain a success. However, the never-ending production of the iPhones is detrimental to the environment. If we all kept our current iPhones for longer than a year, there would be less technology that inevitably gets thrown away – a practice that ultimately contributes to landfills.
A company like Apple is probably more concerned about their profit margin and staying on trend, but consumers increasingly care about the environment and so companies are under pressure to demonstrate their commitment to sustainability.
Apple, for instance, implements programs like device trade-ins as a gesture towards environmental responsibility. This initiative allows consumers to exchange their old devices, offsetting the cost against the purchase of new ones. By doing so they not only promote the idea of recycling and reducing e-waste but also align with the growing environmental concerns of its customer base.
Yet, this approach of offsetting emissions fails to address the true impact of carbon emissions. The endless demand and production of new products inevitably contribute to carbon emissions - something that is not fully compensated for by recycling or trade-in programs alone. The frequency with which consumers upgrade to newer models plays a significant role in driving production cycles, which in turn affects the company's carbon footprint.
Therefore, while initiatives like Apple's trade-in program are steps in the right direction, they also highlight the need for a deeper change in both corporate strategies and consumer behaviors. It's not just about balancing emissions through offsets, it's also about fundamentally changing consumption patterns and corporate practices to prioritize long-term environmental health over short-term gains. So, while carbon offsets are valuable, they need to be part of a larger strategy that includes direct efforts to reduce emissions.
Close
Are carbon offset projects worth it?
When considering whether to invest in carbon offset projects, it's important to understand their role and effectiveness. Carbon offsets are valuable for balancing out emissions, but they don't stop these emissions from entering the environment initially.
Therefore, the decision to invest in a carbon offset project should be strategic. It's most beneficial when a company or individual has already taken steps to reduce their primary carbon emissions and has the financial capability to contribute further. Investing in carbon offsets can then be an additional measure, complementing direct emission reduction efforts.
How to select a carbon offset project
With so many carbon offsetting options on the market these days it can be difficult to know what to look for when selecting a project. For companies committed to genuine environmental impact, it's important to select the most impactful and reliable ones. Let us help demystify the process.
Common types of projects within these programs include:
- Forestry projects - These focus on reforestation, tree planting, and preventing deforestation, playing a crucial role in carbon sequestration.
- Methane capture - Targeting one of the most potent greenhouse gases, methane capture projects aim to reduce emissions from landfills and agriculture.
- Renewable energy projects - Investments in wind farms, hydroelectric power plants, and other renewable sources help reduce reliance on fossil fuels.
- Direct carbon capture - Advanced technologies that directly remove carbon dioxide from the atmosphere or industrial emissions.
Key factors to consider to ensure the effectiveness of the carbon offset project:
- Third-party verification and credibility - Opt for programs that are verified by reputable third parties. This ensures that the carbon offsets are real, quantifiable, and make a genuine difference in reducing CO2 emissions.
- Tangible and measurable impact - Choose programs where the impact on CO2 emissions can be clearly measured and is permanent. The program should have a transparent method for quantifying its environmental benefits, ensuring that your investment is actually contributing to reducing carbon emissions.
- Efficient management and supervision - A well-managed program that is run efficiently and with transparency is more likely to achieve its goals. Look for programs that have a track record of successful implementation and are managed by competent, experienced teams.
- Community benefits - Consider programs that go beyond just offsetting carbon emissions and also provide socio-economic benefits to local communities. This could include job creation, biodiversity conservation, or improved local environmental conditions. Programs that positively impact local communities tend to have a more sustainable and long-lasting effect.
- Compliance with international standards - Ensure that the program adheres to international standards and best practices in carbon offsetting. This not only lends credibility to the program but also ensures that your investment is contributing towards globally recognized environmental goals.
When selecting a carbon offset program, it’s vital to look beyond the surface and evaluate the program’s real impact, management, community benefits, and adherence to high standards. This thorough approach helps prevent the risk of ‘greenwashing’ and ensures that your investment genuinely contributes to combating climate change.
Top 5 carbon offsetting projects
Let's explore the top 5 carbon offset projects that stand out for their impact and innovative approaches:
Terrapass
Terrapass emerges as a frontrunner in combating climate change. With a mission centered on reducing carbon footprints, Terrapass offers a variety of projects for both individuals and businesses. Their initiatives range from renewable energy to methane capture and landfill gas capture, all verified by third parties for their effectiveness. Terrapass has made a significant impact by providing accessible options for anyone looking to make a positive environmental change.
Atmosfair
Specializing in air travel, Atmosfair focuses on reducing carbon emissions caused by flights. They offer various subscription models to offset the carbon footprint of your air travel. Atmosfair's user-friendly approach, complete with a personal certificate for contributions, makes it a go-to choice for environmentally conscious travelers - whether it’s for business travel or leisure.
Myclimate
Operating globally, Myclimate aligns its carbon offset projects with the UN Sustainable Development Goals. Their diverse projects cover areas like hydropower, energy efficiency, land improvement, and water purification. Transparency is key for Myclimate, as evidenced by their annual ESG reports and third-party project certifications.
Carbon Checkout
With the rise of e-commerce, Carbon Checkout provides a seamless way to integrate carbon offsetting into online shopping. Their unique widget allows customers to choose a carbon offset project at checkout, addressing the carbon footprint of their purchases. This integration makes Carbon Checkout a practical option in our increasingly digital world.
Clear
Distinguished by its Quality Assurance Standard (QAS) certification for all carbon offsets, Clear offers a wide range of options to offset daily activities. Whether it's your commute, online activities, or even recreational activities like skydiving, Clear provides accessible and diverse ways to balance your carbon footprint.
What about Greenly?
At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required.
If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.
More articles
View all
California Climate Package: SB 219 & SB 252
11 min
Level
What is the California Climate Accountability Package, and how do SB 253 and SB 261 (SB 219), and SB 252 help the state work towards their environmental goals?
5 concrete solutions to help industrial companies reduce their emissions
3 min
Level
Here are five concrete actions industrial companies can adopt to reduce emissions.
Checklist: The 7 Steps to Start Your CSRD Compliance
2 min
Level
The CSRD imposes new requirements for non-financial reporting. Here’s a straightforward guide to start your compliance journey, without any unnecessary jargon:
Share
Subscribe to the newsletter