A carbon offset represents a reduction in greenhouse gas emissions that can be used to compensate for, or offset, emissions from other sources.

It is measured in tonnes of carbon dioxide equivalents (CO₂e). Because our atmosphere is like an ocean of gases, reducing carbon emissions at any location will benefit the whole system.

Offsets are generated from changes made to avoid or absorb (sequester) greenhouse gases. There are six major greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluocarbons and sulphur hexafluoride.

Carbon neutrality means taking full responsibility for our carbon pollution. Organizations start by reducing directly from the source, such as buying energy efficient equipment, or minimizing business travel. Offsetting is the next step - a way to indirectly cut their remaining emissions in order to achieve carbon neutrality. Carbon neutrality is about recognizing that we are 100 percent responsible for the carbon pollution we generate.

Typically, offset generating activities fall under three categories:

What are the benefits of offsets?

Overall, carbon offsets improve the environment by reducing the amount of greenhouse gases in the earth’s atmosphere. Offset projects often also lead to a number of co-benefits such as better air and water quality, and healthier communities.

Putting a price on carbon encourages innovation by providing funding for new ways to reduce greenhouse gases in many sectors. Carbon reduction goals drive the demand for offsets and carbon trading, encouraging the development of this new industry and offering opportunities for different sectors to develop and use innovative new technologies.

Carbon offset projects also provide savings – energy efficiency measures may reduce fuel or electricity consumption, leading to a potential reduction in maintenance and operating costs.