What Are Carbon Offsets and How Do They Work?

In the shortest and sweetest terms, carbon offsets aim to help reduce the environmental damage dirty energy creates.

How we measure carbon offsets: One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases. – wikipedia.com

How a carbon offset works: “A mechanism by which the impact of emitting a ton of carbon dioxide (CO2) can be negated or diminished by avoiding the release of a ton elsewhere, or absorbing a ton of CO2 from the air that otherwise would have remained in the atmosphere.” – greenmyplanet.net/index.php

In other words: “A carbon offset is a financial donation or other act that aims to remove a certain amount of carbon dioxide from the atmosphere, to compensate for another carbon dioxide emitting activity.” – www.carboninsight.com.au/index.php

Now that we have that straight, a person or company may purchase carbon offsets (by donating money to projects in solar, wind or reforestation) to balance out the things they do that use dirty fuels, such as driving and flying. In the larger, corporate and government industries, carbon offsets are purchased in large quantities to help offset emissions and keep these organizations under the cap of what they are allowed to emit. In that market, in 2006, $5.5 billion dollars were spent on carbon offsets, which represented 1.6 billion metric tons of reduced CO2 emissions; and in 2008, in the smaller, individual and residential market (people often purchase COs as part of a travel package), 705 million dollars were spent and 123.4 million metric tons offset, according to Wikipedia.com.

Illustration by Will Etling from www.good.is

Since the next logical question is, “Where and how do I buy carbon offsets?”, here’s a list (researched and reported by the folks over at Good magazine) of companies who will truly help you out in your lofty goals to offset carbon emissions, and will not just take your money, forgetting to tell you just exactly where they put it.

1. Native Energy, focuses on Native American, local family farms and other community projects.

2. TerraPass, voted the best carbon offset provider, 2010, by Treehugger and number one by Greenopia for their tranparancy.

3. The Climate Trust, tailored to larger businesses and organizations.

For a detailed guide to choosing the right carbon offset provider, read Ben Jervey‘s entire article at Good.

-Jocelyn Broyles

Headline Photo Jean Schweitzer | Dreamstime.com

Love This? Never Miss Another Story.


Jenna Brennan
Jennifer B.4 years ago

I found this article trying to find what carbon offsetting actually means and how it works. So my question is: where does the carbon offset money go when we donate our credits through care2? And why is Care2 not mentioned in the article?

Charuwan Kangkagate

thank you for all the knowledgeable information.

John S.
Past Member 4 years ago

Right now companies are trying to be socially and environmentally responsible but also business responsible, and they're having a hard time, and many are falling all over themselves to demonstrate that they are environmentally conscious in order to take your money, even if it's doing nothing meaningful to help the environment. Some businesses are genuinely committed to making the world a better, greener place, for some, it makes the most sense for the bottom line. But for far too many others, environmentalism is little more than a convenient slogan. Buy our products, they say, and you will end global warming, improve air quality, and save the oceans. So you're washing fewer towels? Good for you. That's not saving the planet -- it's saving you money. You're recycling? Nice, but in many places, that's just following the law. By all means continue implementing sustainable practices, so you can become more efficient and save money in the process, but be honest in your message.

Will L.
Past Member 4 years ago


Elizabeth P.
.4 years ago

Why are there so many ways to claim to be green without really committing to being truly green?

Obviously a rhetorical question ...

Henri P.
Henri P.4 years ago

Good information noted.I will use all my butterflies in the future fo carbon offsetting and tree planting.Maybe suitable goal would be one offsetting per day and one tree per day(if its price would stay at 500:)

Ireven G.
Ireven G.4 years ago

there should be a better way.

Danuta W.
Danuta Watola4 years ago


Jeanne B.
Jeanne B.4 years ago

Hum. Maybe this is a stupid question but blame it on an awful headcold: why is the CarbonFund we contribute to with our butterfly credits not listed in this article?

Henri P.
Henri P.4 years ago

Of course this is a bit difficult thin.Generally i like the idea of carbon offsetting. It increase peoples awereness that something could be done about climate change. It is important feeling. Having feeling that nothing could be done is more dangerous.And someone who is making carbon offsetting also can get valuable information and maybe with that information they start to take action in their own lives to reduce carbon footprint. And they start to make choices that will also effecting to large companies.