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Carbon offsets


Offsets are typically achieved through financial support of projects that reduce the emission of greenhouse gases (GHG) in the short- or long-term.

An offset is produced by

The most common offset project type is renewable energy, such as wind farms, biomass energy, or hydroelectric dams. Others include energy efficiency projects, the destruction of industrial pollutants or agricultural byproducts, destruction of landfill methane, and forestry projects. (1)

There are enormous opportunities for good with offset systems. Many biological sequestration projects involve changes to land use, agriculture, or forestry practices. These could slow or reverse habitat destruction such as cutting of rainforest or drainage of wetland.


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Preventing GHG production


These are projects that prevent emissions that would have occurred otherwise.

An example would be building a wind or solar power generation system to replace a coal-fired electrical plant.


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Carbon sequestration


Carbon sequestration means trapping or removing GHG from the atmosphere. There are two ways to sequester carbon:

  • Geological sequestration – basically storage of CO2 deep underground
  • Biological / terrestrial sequestration - the net removal of GHG from the atmosphere by plants and micro-organisms and its storage in vegetative biomass (biological) and in soils (terrestrial).

See also Carbon sequestration


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Offsets and regulation


All offset types can be sold on the voluntary market based on market supply and demand.

In a regulated Cap & Trade environment, offsets accepted for compliance can only be derived from an uncapped sector.

For example, at the present time, offsets could only come from the uncapped sectors of agriculture, forestry, and landfills.


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Offset providers


There are a lot of companies out there offering offsets. Some are a lot like snake-oil salesmen - you really don’t know what you are getting.

The David Suzuki Foundation and the Pembina Institute have prepared a guide to help Canadians assess the quality of available carbon offsets. The guide includes a survey of 20 carbon offset vendors from Canada and around the world to help shed light on how these vendors are performing.


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Clean Development Mechanism (CDM)


By effective use of tools like the United Nations Framework Convention on Climate Change's (UNFCCC) Clean Development Mechanism (CDM), it’s possible to transfer some real wealth and sustainability to developing nations by buying offsets. (2)

CDM allows developed countries to invest in offset projects in developing nations instead of the more expensive alternative of reducing emissions or buying credits at home.

However, sufficient value has to be given to these schemes to make them more attractive than the destructive alternatives within the developing nations that are to implement them.

Also, protocols need to be developed to address all of the issues of additionality, measurement, permanence, validation, and verification for each type of offset. Working out these mechanisms is the subject of much study and a hot topic of debate now.