Carbon Offsets 101

Carbon offsets have become all the rage recently: The winter Olympics of 2006 in Turin, Al Gore, the U.S. country-rock trio Dixie Chicks, and Hollywood actor George Clooney all buy offsets in an effort to become “carbon neutral. ”The New Oxford American Dictionary even chose “carbon neutral” as the Word of the Year for 2006. As public awareness of the driving role carbon emissions play in climate change becomes nearly universal, the pressure to take action is increasing and many firms and individuals who have decided they want to do something about it are purchasing offsets.

Yet there is a lot of confusion, ambiguity, and even hype surrounding carbon offsets. What exactly does it mean to “offset” a ton of carbon dioxide (CO2) emitted into the air? Why does the price of a ton of CO2 vary wildly from one offset broker to another? What do you really get for your money? Are offsets just a cheap way to ease the guilt of shoppers, motorists, and frequent flyers, or can they really contribute to climate protection in a meaningful way? The concept is very simple. All fossil-fuel powered vehicles (as well as fossil-fired power plants and factories) emit CO2 during operation. Commercial jets are no exception, and collectively contribute a significant share of global annual emissions. So let’s say you fly on a commercial carrier from Chicago to Amsterdam.You would use one of the many online carbon calculators to determine your share of the CO2 emitted by the aircraft. (The best of these calculators will consider such factors as the total distance, the increased warming impact of emissions at high altitude, the aircraft type, how full it was, and whether the flight was direct or involved a stopover, but most are much less sophisticated.) In this example, you might find that you were responsible for 3.5 tons of CO2 emissions. You would then pay a carbon offset company for 3.5 tons of CO2 offsets. The company (or nonprofit organization) would then invest your money in a project meant to reduce greenhouse gas emissions and you get credit for a share equal to the carbon you were responsible for on your flight. Because climate change is a non-localized problem, it doesn’t matter where the emissions are reduced. Greenhouse gases spread evenly throughout the atmosphere and reducing them anywhere contributes to protecting the climate. The same method can be used to offset the annual mileage accumulated by an automobile, or the emissions of a stationary source such as a power plant...