You can fight climate change with carbon offsets — but what are they?

Ontarians wanting to do their part for the environment might consider carbon offsets. We explain what they are, how they work, and where to buy them
By Daniel Kitts - Published on July 13, 2018
smoke stacks in Sarnia, Ontario
Carbon offsetting involves paying to reduce emissions elsewhere in order to compensate for the greenhouse gases you generate. (Stephen C. Host/CP)

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It’s becoming increasingly unclear whether provincial governments are prepared to step up their efforts to fight climate change. Ontario has walked away from its cap-and-trade system, the official opposition in Alberta is vowing to do the same with that province’s carbon levy if it wins power next year, and conservative politicians across the country are taking every opportunity to fight the Liberals’ plan to impose carbon pricing. And with a federal election coming in fall 2019, there’s no guarantee that the federal Liberals’ carbon tax, which comes into effect in January 2019, will be around for very long.

So what should people who think it’s vitally important to reduce greenhouse-gas emissions do if governments fail to tackle the problem? One option is to buy carbon offsets.

What are carbon offsets?

Carbon offsetting involves paying to reduce emissions elsewhere in order to compensate for the greenhouse gases you generate. The credits you purchase from an offset company are invested in a project — say, a wind farm that creates emission-free energy — that reduces the amount of greenhouse gases going into the atmosphere.

Offsets are bought by the tonne. When you buy a tonne of carbon, one less tonne of CO2 will end up in the atmosphere.

Carbon offsets vary in price depending on a number of factors, including the kinds of projects that the offset company is investing in — but they generally cost between $20 and $30 per tonne before taxes.

Individuals and companies can both buy offsets. The Association of Municipalities of Ontario, for example, has purchased offsets through the company Planetair to compensate for the carbon generated by people travelling to its conferences.

“The association clearly has an interest in [combatting] climate change,” AMO executive director Pat Vanini says. Many municipalities are already spending money in anticipation of more intense weather caused by rising temperatures.

Ron Seftel, CEO of green-energy company Bullfrog Power, says offsetting is one way to address a big challenge in tackling climate change: people want to do their part, but they don’t want to seriously disrupt their way of life.

“If you said, ‘No one should go on vacation anymore because that causes emissions,’ that’s a problem,” he says. “People want to enjoy their life.”

Less.ca, a subsidiary of Bullfrog Power, is Air Canada’s official provider of carbon offsets for travellers who want to reduce the climate impact of their flights.

Seftel says Bullfrog first encourages people to take steps to reduce their own emissions and buy the company’s other products, such as low-carbon fuel, before resorting to offsets. But, he adds, when it comes to some activities, such as air travel, an offset is the only way to reduce your climate impact.

“I have a son who’s going out east to school next year, so he’s going to have to fly,” Seftel says. “There’s no such thing as an electric plane.”

Buyer beware

If you Google “carbon offsets,” you will find a bevy of companies that sell them. But not every company in the offsetting business is credible, and not all offsets are the same — so it’s important to do your research.

The David Suzuki Foundation offers a guide to help people make informed choices when buying offsets. One big tip: avoid offset companies that invest heavily in tree planting. “[A]lthough quite popular, offsets from tree-planting projects are problematic for a number of reasons, including their lack of permanence and the fact that these projects do not address our dependence on fossil fuels,” the guide states.

The foundation also urges buyers to make sure their offsets create “additionality.” In other words, would the project being invested in exist without extra funding from the sale of offsets? There’s no point in buying an offset for a solar farm if a government or company has already committed to building and fully funding it.

The guide provides a list of questions you should ask a company before making a purchase, including:

  • What specific offset projects (e.g., wind farm, methane capture) are in your portfolio, and where are they located?
  • How do you ensure that the greenhouse-gas reductions that your carbon offsets represent are quantified accurately?
  • Are 100 per cent of your offsets validated and certified by an accredited third party?

Another way to figure out which offset companies are the real deal is to look for ones that count major companies among their clients, says Jason Switzer of the Pembina Institute, a non-profit think tank that focus on energy issues. He says companies with public reputations would be very sensitive to allegations of “greenwashing” — offering so-called green products that actually don’t do much for the environment.

“These companies are going to go through a pretty elaborate process of due diligence around the projects that their provider is sourcing, and that level of scrutiny is going to be a lot more rigorous than any individual retail purchaser is going to go through,” Switzer adds.

Another thing to consider is the type of offsets you are buying. There are a number of recognized carbon-offset standards, such as the Gold Standard, which is supported by more than 80 non-governmental organizations and focuses on projects in developing countries. The drawback is that Gold Standard credits tend to be more expensive.

Through other standards, such as VCS and VER+, you can direct your offset to Canadian projects. These offsets tend to be cheaper than what’s available through the Gold Standard.

Opposing views

Not everyone is sold on the idea of offsets. Keith Stewart, climate and energy campaigner with Greenpeace Canada, writes in an email that while offsets were useful in the early days of the GHG-reduction effort, they’ve become less important as clean technologies have become more economically viable and started attracting major investors. He also says that it’s not always clear whether offsets are “additional” — financing reductions in carbon that would not have happened anyway.

Stewart says people should focus instead on getting governments to act.

“I totally get people wanting to do something in their own lives,” Stewart writes. “But I don't think we effectively respond to Ford/Trump politics with a consumer response … Offsets offer a market alternative to good policy that shifts problems that really need to be solved in the public sphere into the private sphere of consumer choice.”

Switzer agrees with Stewart that pressure needs to be put on governments. He points out that while people can take it upon themselves to offset their carbon footprint by several tonnes a year, the federal government’s pan-Canadian framework on climate and energy is supposed to collectively reduce more than 200 million tonnes of carbon-dioxide emissions per year by 2030.

Even so, Switzer does see some value in offsets. He says “voting with your money” can sometimes move corporations and governments to act and points out that organic vegetables and fruit started appearing in major supermarkets because a growing number of consumers were buying them.

“With a global problem like climate change, you need all governments essentially to be working together to deal with this,” he says. “But that doesn’t mean private transactions aren’t a way of demonstrating and signalling to entrepreneurs that this is a real thing.”


CORRECTION: An earlier version of this article mistakenly named Keith Stewart's place of employment as WWF-Canada. Stewart works for Greenpeace Canada. TVO.org regrets the error.

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