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Writer's pictureMAGDA CHEANG

The Basics of Carbon Offsetting and Carbon Credits

Updated: Jan 17

Welcome to our first post on the basics of a variety of mechanisms that can help with the climate crisis. In this informational series we'll explore different solutions to the climate-crisis across a range of topics on a monthly basis. Today, we'll explore carbon offsetting and carbon credits.



carbon credits
CO2 from a factory

Carbon Offsetting

Carbon offsetting is a practice aimed at mitigating the environmental impact of carbon emissions by investing in projects and activities that reduce or remove an equivalent amount of greenhouse gases (GHGs) from the atmosphere. It is used to compensate for emissions that individuals, organisations, or businesses are unable to eliminate entirely. Common carbon offset projects include reforestation, renewable energy initiatives, energy efficiency projects, and methane capture from landfills.


Voluntary Carbon Market

The voluntary carbon market is a marketplace where individuals, organisations, and businesses can voluntarily purchase carbon offsets to balance their own carbon emissions. Unlike compliance markets, where companies are obligated to meet emission reduction targets set by regulations, the voluntary carbon market allows participants to engage in carbon offsetting without legal requirements. Participants in this market choose to offset their emissions as a matter of corporate responsibility, sustainability goals, or personal commitment to environmental stewardship.


Carbon Credits


Carbon credits, also known as carbon offsets or carbon offset credits, are units of measurement representing the reduction, removal, or avoidance of one metric ton of carbon dioxide equivalent (CO2) emissions. They are typically generated and issued by projects and initiatives that reduce GHG emissions or sequester carbon. These credits can be bought, sold, or traded in carbon markets to help balance the carbon footprint of an entity. Each carbon credit is associated with a specific project and has a unique serial number to ensure traceability.


In the voluntary carbon market, individuals and organisations purchase carbon credits to compensate for their own emissions, effectively financing carbon reduction or removal activities elsewhere. In the compliance carbon market, such as cap-and-trade systems or under international agreements like the Kyoto Protocol, carbon credits are used by regulated entities to meet their emission reduction targets.


The concept of carbon credits and carbon offsetting has gained prominence as a tool to address climate change and promote sustainability. However, it's important to note that carbon offsetting is not a substitute for reducing emissions at the source, and it should be part of a broader strategy to combat climate change. Recently, there has been an increase in companies that are providing certification, carbon accounting and carbon market software tools. There are a variety of carbon offsetting jobs that have been created as a result.


Looking for a job in Carbon Offsetting or looking to hire? We're here to help!



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