Is offsetting carbon worth it? This question has never been more controversial right now and it deserves a good answer, especially if you’re into carbon offset credits.

If you shop online, take flights, or use ride-hailing apps like Uber, you’ve likely noticed the option of including carbon offsetting when making your purchases. Many companies allow consumers to voluntarily offset the carbon emissions of their rides, flights, or product deliveries by paying for them out of their own products.

But is there an incentive for companies to offset carbon emissions themselves?

Through initiatives like carbon credits, companies can invest in emission reduction projects that will help them move towards carbon neutrality.

So, does offsetting carbon worth it? Do carbon offsetting projects actually do what they say they will? And what else can companies gain by offsetting their carbon emissions?

Before we give you all the answers, let’s get back to basics first by explaining what carbon offsetting is all about.

What is Carbon Offsetting?

Each person on this planet has a carbon footprint, but the size of that footprint is dependent on the actions we take on a daily basis. A carbon footprint is the total amount of greenhouse gases generated by an entity, such as a person, company, event, or place.

The most powerful greenhouse gases are carbon dioxide, methane, and nitrous oxide. But carbon dioxide is the most significant contributor to climate change. That’s not because carbon dioxide is more destructive than the others, but because it’s the most common gas generated by human activity. 

That is why there has been a bigger push and focus on carbon offsetting. It’s true that individual activities like daily transportation, diet, and household energy consumption have a part to play. Yet, the largest contributors of carbon dioxide are companies.

In fact, according to The Carbon Majors Database (published by the Carbon Disclosure Project), 71% of the world’s industrial emissions over the last 50 years were produced by just 100 companies. That doesn’t mean individual decisions don’t still have tremendous power, but it’s especially important for companies to consider offsetting carbon.

Carbon offsetting provides gives individuals and companies with an accessible means of offsetting their emissions. One way is by investing in carbon reduction projects such as tree planting initiatives. 

Companies can seek out specific environmental projects like this on their own and partner with them or buy carbon credits from a carbon credits broker, who will invest in offsetting programs on your behalf. If you have a specific cause you’re particularly passionate about, you can channel your carbon-offsetting investment directly to that.

Now that we’ve covered what carbon offsetting is, let’s look at whether carbon offsetting is worth it. What are the benefits?

Carbon Offsets Help Reduce Climate Emissions

We are all aware that the global temperature is rising, along with sea levels. The evidence for climate change cannot be argued, and human emissions have the biggest impact, contributing to 90% of all carbon dioxide emissions. Most people go about their daily business without giving climate emissions much thought.

But what if they cost money?

We bet that people would think twice about their actions if they had to pay for the carbon they emit. Carbon offsetting programs like carbon credits help reduce climate emissions by putting a price tag on emissions, encouraging corporations and companies to implement emission reduction initiatives (or pay the price!).

And while carbon offsetting is still, for the most part, voluntary, there is a global push to reduce emissions. And with that push will come more regulations.

• Depending on the regulatory efforts of countries, research from BloombergNEF estimates the cost of carbon offsets could increase by up to 3000% by 2029.

If that isn’t a reason for companies to get the jump on emission reduction efforts, then what is?

Carbon Offsetting Channels Funds to Conservation and Sustainable Development

Carbon offsetting enables companies to tap into and support some incredible conservation and sustainable development projects that positively impact our planet.

Companies can choose projects that align with their values and have the most significant carbon reduction impact. As the number of carbon offsetting and carbon credit programs continues to grow exponentially, their creditability is of utmost importance.

For those wanting to work directly with carbon offsetting organizations, ensure they are accredited by a third party, such as the International Carbon and Offset Alliance (ICROA), American Carbon Registry, and Climate Action Reserve.

• Some examples of projects that offset carbon include waste to energy, reforestation, renewable energy (wind, hydro, solar), kelp forests, or avoided emissions projects.

Boosts Company Reputation

Identifying as a carbon-neutral company can boost your reputation as a positive, environmentally friendly, and purpose-oriented corporation.

• Reputation is essential for the success of any company or business.

Companies should all adopt CSR (corporate social responsibility), which shows consumers that they operate transparently. And with increased global awareness around sustainability and climate change, consumers expect companies to operate sustainably and responsibly.

By doing so, and being transparent about carbon offsetting practices, you can expect a nice reputation boost! And this reputation boost makes your company more likely to attract the attention of potential consumers and media outlets. That leads us to the next benefit.

Gives Companies a Competitive Edge/Advantage

As previously mentioned, companies operating sustainably is no longer just an added bonus; it’s an expectation. So, are you implementing carbon reduction practices, or at the very least investing in carbon offsetting? If not, then you will soon fall behind any competitors who do.

Consumers who have the choice between a carbon-neutral company and one that is not will inevitably choose the more eco-conscious company. A recent study from SmartestEnergy revealed that 4 of 5 people would choose companies with sustainable environmental practices over those without.

To keep a competitive edge, companies will NEED to participate in carbon offsetting. And that’s regardless if it’s on a voluntary basis or not.

Is Carbon Offsetting Sustainable Long-term?

Some are concerned that carbon offsetting is not an effective long-term solution to climate change. And they may be right.

But the true goal of carbon offsetting isn’t to be the only solution for all of time. What carbon offsetting provides a reinforced company commitment to sustainability and sustainable practices.

Even with companies making no changes to their operations, they’re still investing in projects that will improve how the world operates. But inevitably, companies will be forced into operating more efficiently and reducing their carbon emissions because of carbon offsetting.

The price for carbon offset credits will continue to rise, and while they may be mostly voluntary at this point, it won’t be long before it’s legally mandated.

There are already many mandatory international and regional carbon reduction schemes, such as the California Carbon Market and the Emissions Trading System (ETS) in Europe. And we will see more of them in the coming years. Because of this, companies will be accountable to strive for emission reduction before buying carbon offsets becomes a mandate.

Are Carbon Offsets a Tool for Greenwashing?

Another common misconception about carbon offsetting is that it has the potential to be a tool for greenwashing. 

The ability to offset carbon emissions enables companies to claim they are carbon neutral without actually having to update their processes to reduce operational carbon emissions. And this could mislead consumers to believe that carbon offsetting is not worth it.

While that concern is valid, the reality is that few companies will fork out the money for carbon offsets or carbon credits if they have no concern for the planet or their impact. Most companies use carbon offsetting as a tool for positive change. And that’s while they work on implementing new and more efficient practices.

For firms that invest in carbon offsetting without any intention to make operational changes, they will continue to pay a higher premium for their choices. And that money will go directly into world-changing projects.

How Can You Choose the Best Carbon Offsetting Solution?

Choosing the best carbon offsetting solution can be challenging. Voluntary programs are regulated mainly by private entities (with some not regulated at all).

Can we actually trust private entities like Verified Carbon Standard and Climate Action Reserve to connect us with legitimate programs and missions?

For now, it’s the best we have. But as carbon offsetting continues to become legally mandated, we expect that government entities will be the ones to regulate them. 

In the meantime, initiatives like The Voluntary Carbon Markets Integrity Initiative have developed a Claims Code of Practice. This initiative is to improve the integrity of carbon offsetting programs, verify climate claims and provide guidance to companies wanting to buy carbon credits.

Initiatives like this can benefit companies that are new to the carbon offsetting game. But your own research will be a key asset in the hunt for a program that aligns most with your offsetting needs.

There are carbon offsetting programs that are:

• Crypto-based
• Nature-based
• Technology-based
• Energy and transportation-based

All these sectors require support and have impactful and reputable carbon-offsetting initiatives worth investing in.

So, Is Carbon Offsetting Worth It?

The only way to be carbon neutral is through carbon offsetting. It’s not possible to produce zero carbon. So carbon offsetting is the best way to decrease our actions’ negative impact on the environment.

Emissions reduction should always be at the core of everything we do as individuals and as companies. But carbon offsetting will always be worth it and can take us to carbon neutrality that we all should be striving for.

If you’re unsure where to begin your carbon offsetting journey, purchasing carbon credits is always a good place to start. These credits are then invested into verified and thoroughly researched carbon offsetting programs.