What Are Carbon Offsets, Really?


Carbon offsets and renewable energy credits are similar but not the same. Both are simple ways to reduce your carbon footprint–in theory.

But do carbon offsets or renewable energy credits actually reduce carbon emissions and fight climate change?

Something is better than nothing, and both are steps in the right direction. But debate rages over how much buying a carbon offset, or a renewable energy credit, actually impacts climate change.

Carbon offsets work by taking carbon out of the atmosphere (like planting trees that turn carbon from the air into wood) or by preserving carbon that would be released (e.g., preventing deforestation). But do the trees actually get planted, or does the forest actually get preserved? Would the tree actually have been planted anyway, whether you bought the offset or not? It’s often hard to tell.

Renewable energy credits are more complicated. Basically, laws say that if somebody produces wind energy or solar energy, they get to sell each unit of energy to the electric grid–and they also get another unit they can sell, called a renewable energy credit. So what you’re really buying when you buy a renewable energy credit is that extra unit–and here’s the key–from a windmill or solar farm that already exists.

So are you actually causing less carbon to go into the atmosphere? It’s debatable. You are, at the least, encouraging more wind and solar to get built–because you’re showing that people will pay a premium for it. But it’s not as direct or complete an impact as, say, putting solar power on your roof or reducing your energy consumption with a smart thermostat.