In a perfect world, we’d all be leading happy, healthy, zero-carbon lives.
But that’s future plans. Right now, the reality is that each American creates a lot of carbon—about one-and-a-half tonnes every month. (That’s an average—you can use a carbon footprint calculator to crunch your numbers more exactly.)
What is carbon offsetting?
If you want a refresher, we have an in-depth guide to how carbon offsets work.
But the gist is this: Carbon offsetting enables us to balance out emissions we’ve created by funding an environmental or technological initiative that saves or prevents an equivalent amount of carbon.
Why are there so many different carbon offset projects?
The dizzying array of carbon offsetting projects available—plus all their classifications, or protocols—can be mind-boggling. It doesn’t help that currently, the offsets industry doesn’t universally agree on neat and tidy standardized categories.
Flashback to the Kyoto Protocol, the 1997 global environmental agreement that introduced the concept of offsetting, and the main categories were renewable energy, methane abatement, energy efficiency, sequestration and fuel switching.
But today, we tend to slot projects into five similar-but-different big buckets (we’ll get into these later): renewable energy and efficiency, natural carbon solutions, industrial carbon solutions, waste management, and recycling and reuse.
We can now mitigate GHGs in ways that didn’t even exist five to 10 years ago.
Unintuitively, it’s actually a good thing that the market is so confusing right now.
“There are so many new, innovative ways that companies are figuring out how to reduce, reuse, capture and avoid carbon emissions,” explains Lizzie Aldrich, VP of business development for Bluesource, which specializes in environmental products (including offsets) and services. In fact, we can now mitigate GHGs in ways that didn’t even exist five to 10 years ago—and that’s cause for optimism.
Ready to put your money where your head and heart are?
Read on for examples of the kinds of offsetting projects you can back in each “bucket”—renewable energy and efficiency, natural carbon solutions, industrial carbon solutions, waste management, and recycling and reuse—and the difference they’ll make.
And remember, this is just a starter-sized sampling of the smorgasbord of options out there.
5 types of carbon offset projects you need to know
1. Renewable energy and efficiency: The quest for a clean grid
What it is: Humans got ourselves into this climate crisis mainly through energy consumption—namely, burning fossil fuels —so it stands to reason that our climate-friendly future includes fundamentally rethinking how we power our lives.
That’s where renewable energy and efficiency projects come in. These cover everything from generating clean energy through wind and solar to reducing energy demands by retrofitting buildings.
Why it matters: No single climate solution is the magic bullet, but finding ways to use less energy and then getting that energy from renewable sources probably offer our best shot and biggest hope right now.
While there’s currently no clean way to combust fossil fuels, we already have multiple paths to generating zero-carbon electricity. (Beyond wind and solar, there’s also nuclear, hydro and geothermal energy.)
Electricity isn’t inherently environmentally sound. In fact, in 2018, the electricity sector was the second-largest source of GHGs in the U.S., accounting for nearly 27 percent of the total—because so many power plants actually burn coal and natural gas as (fossil) fuel to make that electricity.
But imagine the profound impact if we could get that number down to zero percent? It’s not a pipe dream—we have the technology today. That’s why there’s a growing movement to clean up electricity generation and then “electrify everything” as the simplest plan for decarbonization.
In action: China is the world’s largest CO2 emitter and has more coal-fired power plants than anywhere else. So you may be surprised to learn that the country has been investing heavily in renewable energy. In the province of Gansu, for instance, one major project saw the installation of 134 new wind turbines generating about 431,000 MWh of electricity per year (enough to power 55,481 average American homes).
With ambitions to be the best in the world at clean energy, China currently has more than 135,000 turbines on and offshore
It’s all part of the Gansu Changma Wind Power project, which reduced emissions by 443,868 tCO2e in 2017 (roughly the amount you’d get from burning almost 500 million pounds of coal).
And these turbines are just a few in China’s mega arsenal: With ambitions to be the best in the world at clean energy, the country currently has more than 135,000 turbines on and offshore, generating more than 235 GW of electricity per year.
It’s worth pointing out that clean energy projects aren’t just a feel-good cause. They’re economically viable, too, and often just as (or more) profitable as the old polluting ways of generating power. Solar, for instance, is now the cheapest source of electricity.
As renewables become more profitable, projects are becoming more popular—and cropping up on their own
As renewables become more profitable, projects are becoming more popular—and cropping up on their own. This success is why Verra’s Verified Carbon Standard—one of the major international programs for approving carbon offsets—has stopped listing new projects in the renewable energy space.
“We want to make sure financing for offset projects is going to the places where it is needed most,” explains David Antonioli, CEO of Verra.
2. Natural carbon solutions: Seeing the forest for the trees
What it is: When you think about carbon offsetting, tree-planting is probably one of the first examples that leap to mind. And you’re right—it’s a classic natural carbon solution, a term that refers to any measure that works with nature to sequester carbon.
This category also includes projects that enable forests to regenerate and that protect existing ecosystems, including ocean and coastal habitats. (Mangroves, salt marshes, kelp forests and sea grasses can capture and hold carbon, too.)
Why it matters: Natural carbon solutions are the OGs—low-tech, tried and true. There’s no debate about whether forests work; they’re literal carbon-sucks, taking CO2 from the air and turning it into branches, roots and leaves (aka biomass) as part of photosynthesis.
That means straightforward conservation is a natural carbon solution—just preventing forests from being cut down or grasslands from being tilled means they can keep doing their carbon-capturing job.
Besides conserving the resources we have, there’s a push to renew, too. One recent study calculated that if humans could plant about a half trillion trees, we could capture about 205 gigatons of carbon, reducing atmospheric carbon by a massive 25 percent.
But before you get too hyped, planting a whole bunch of saplings won’t rescue us from our climate meltdown.
For one, forests can also be carbon emitters, releasing CO2 when they die and decay—or go up in flames—and logging is a huge hidden source of GHGs. Plus, growing enough trees requires the very thing we definitely don’t have: loads of time.
Reforesting an area the size of the U.S. and Canada combined (1 to 2 billion hectares) could take 1,000 to 2,000 years, and then the trees still have to mature. So while natural carbon solutions are effective and important, we can’t wait—we need them in tandem with other actions.
In action: Spanning 14 million acres, the Great Bear Rainforest Carbon Project in British Columbia, Canada, is home to the world’s largest remaining intact coastal temperate rainforest. The offsetting project reduces emissions through what’s called “improved forest management”—saving tracts once earmarked for timber harvesting/logging by converting them into protected forest.
It achieves this by making changes in land-use legislation and regulation. The project generates up to 1 million tCO2e annually in carbon credits, with revenue going to the nine Indigenous communities living on the land.
3. Industrial carbon solutions: Clearing the air
What it is: If we were to add up direct and indirect greenhouse gases coming from the industrial sector in the U.S., they’d make up 29 percent of the country’s total emissions (the biggest slice of the pie).
And while turning to renewable energy and improving fuel-efficiency are a good start, the fact remains that many industrial processes inevitably create some emissions.
Solutions in this category include projects like carbon capture, utilization and sequestration, including burying emissions underground. Another example? Waste CO2 can be used in concrete production, permanently trapping gases that would have ended up in the atmosphere.
Industrial solutions also encompass what’s called “refrigerant management”—basically, preventing compounds like hydrofluorocarbons (HFCs), which are potent greenhouse gases, from going up in the air when we dispose of appliances like freezers and air conditioners.
These include projects that reclaim and recycle refrigerants, as well as ones that collect refrigerants to safely dispose of them.
Experts say the safe level of carbon dioxide in the atmosphere is 350 parts per million (ppm), max
Why it matters: Climate experts say the safe level of carbon dioxide in the atmosphere is 350 parts per million (ppm), max. Don’t panic, but we’re well past that now. Emissions have been climbing ever since the Industrial Revolution, and we crossed over an ominous line—400 ppm—in 2015.
Even if we were to stop emitting planet-warming gases right this second, there are already way too many in the air, so industrial carbon solutions are critical.
In action: In Texas and Wyoming, Bluesource has developed multiple projects that grab large-scale emissions from industrial sources, like natural-gas processing plants, and permanently bury those emissions deep underground in geologic formations. Through this carbon capture and sequestration (CCS), such projects can lock away 500,000 to 2,000,000 tCO2 per year.
And carbon offsetting plays the role of that persuasive salesperson who seals the deal: “Without the carbon revenue from these projects, there is no incentive for companies to avoid venting the CO2 into the atmosphere,” explains Aldrich of Bluesource.
Large pile of clear plastic bags filled with recycling
4. Waste diversion and management: Turning trash into a resource
What it is: Offsetting projects under this umbrella aim to keep household and commercial organic waste (especially from food production and agriculture) from dying a slow death in landfills.
Today, there are better ways to dispose of organic matter—like using it to produce clean energy, known as biogas and biomethane.
Why it matters: When banana peels, corn husks and other organic waste decompose anaerobically (without oxygen around), which is what happens in modern landfills, they emit methane—a greenhouse gas with a global warming potential 25 times greater than carbon dioxide.
We collectively throw out so much organic waste that in the U.S., municipal solid-waste landfills are the third-largest source of human-related methane emissions (and that’s not even considering commercial waste). Whatever we can do to reduce this—while also turning garbage into something useful—is a pretty big deal.
Municipal solid-waste landfills are the third-largest source of human-related methane emissions
In action: C&B Farms grows produce in 9.2 acres of year-round greenhouses in Ontario, Canada, which require lots of heating when the cold weather hits. That energy used to come from combusting “bunker fuel” (sludgy black stuff from the leftovers of petroleum distillation), until C&B decided they could repurpose local industrial waste to do the job.
They installed a biomass boiler, which turns about 210 tons of organic matter every week into energy for heating. And presto: less waste winds up in the landfill, and less fossil fuel is burned to keep the whole operation humming.
Over its lifespan, expected to be at least 15 years, it’s estimated the project will have cut emissions by 64,500 tCO2e. That’s like taking 13,935 passenger vehicles off the road for a year.
5. Recycling and reusing: What goes around comes around
What it is: Chances are, you’re already a faithful follower of the three Rs, diligently directing your soda cans to the right place. But in the context of carbon-offsetting projects, recycling and reuse can encompass a whole lot more, including recovering discarded plastic from the environment, treating and reusing industrial wastewater, and refurbishing yesterday’s computers for their second life.
Why it matters: Offsetting projects based on recycling and reuse are brilliant because they do double duty in cutting emissions. First, they divert waste from landfills, where it would otherwise emit potent methane while decomposing (the same way organic waste does).
And second, they decrease the need to make entirely new things from scratch with virgin resources, an incredibly carbon-intensive activity.
The world hit a record 53.6 million metric tons of e-waste in 2019
In action: Many of us can’t live or work without our laptops, tablets and smartphones, but thanks to short product lifecycles and limited repair options, electronic waste abounds. In fact, the world hit a record 53.6 million metric tons of e-waste in 2019, and we’re projected to reach 74 metric tons by 2030. Too often gadgets get junked, even when they could be reused.
As part of the CO2 Neutral project, Comsale Computer Inc. refurbishes old IT devices like computers through tasks such as wiping data, repairing, replacing parts and reassembling, making cosmetic fixes and more.
Over the life of the project, expected to be at least 10 years, it’s estimated it will reduce emissions by 303,400 tCO2e (the amount we’d save by switching 11.5 million incandescent bulbs to LED lights).
Do carbon offsets actually work?
Carbon offsets have their fair share of critics, who warn they shouldn’t be viewed as a “get-out-of-jail-free card” that soothes our conscience while we keep driving gas-guzzling vehicles and over consuming *gestures broadly at everything*.
After all, cutting emissions needs to be at the top of our to-do list, given our current reality: Today’s carbon dioxide levels are higher than they’ve been in 800,000 years.
Then again, we could look at that same stat and make a different argument: The state of our climate emergency is so urgent, we need to pull out all the stops to save the planet—and ourselves.
Carbon offsets may be only one solution among the many we need, but that makes them crucial just the same.
Keep up to date with the Good News(letter)
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada, RBC Ventures Inc., or its affiliates.