How Carbon Offsetting works

While individuals, companies or governments generate huge amounts of carbon, there are specific programs and organisations that exist to take carbon out of the atmosphere. 

In Australia, there are some sizeable carbon reduction programs. Some are busy growing new forests and protecting existing ones, and it’s programs like these that pull (or draw) so much carbon out of the atmosphere as to generate negative emissions. By drawing carbon down like this, they can offer a carbon credit to someone who wants to offset (or reduce) the emissions they’ve generated elsewhere.

A carbon offset is a way to compensate for the emissions we might create by matching it to a reduction in carbon somewhere else. It’s a bit like an accounting process to help ‘balance the books’. However, while this does help reduce our own impact, there’s a cost involved; you have to buy the offset.

This makes ‘offsetting’ a solid solution for getting our emissions all the way to zero after we’ve done everything else we can get to get our carbon numbers down.

Offsets are measured in tonnes of carbon dioxide-equivalent and to offset some of our emissions we can purchase these carbon credits, which often come from the growth of new forests and the protection of existing forests from logging. This funds forest conservation efforts that create measured, reported and verified carbon benefits.

Purchasing carbon offsets provides a way for you to access a third option which directly funds climate solutions – without having to try to find impactful climate projects yourself.

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs. You should, before acting on this, consider the appropriateness to your circumstances.