A Carbon Offset acts to counterbalance a carbon-emitting activity. 

Most commonly, Carbon Offsets are purchased in a market where the buyers are individuals or corporations, and the sellers are owners of a program involved in things like renewable energy, reforestation, forest preservation, and many other "green" programs. 

The effectiveness of Carbon Offset programs are widely debated. 

Are Carbon Offsets a Scam?

A buyer of a carbon offset is not pledging to reduce emissions themselves, but rather paying someone else to balance their emissions. 

This great video from the YouTube channel "Wendover Productions" highlights how the Carbon Offset market can range from being ineffective to down right being a scam:

Offsets are Promises

A common offset project is a forest preservation project. Most commonly these are promises such as "The forest will be protected from all forestation in the next 100 years". 

There are a couple of big problems with these kind of projects:

  • A forest might be left untouched even without a carbon offset program. Think selling offsets for a National Park in America. It's a non-productive promise.
  • Promises can be broken. A company might write off their carbon offsets and consider themselves carbon neutral, but if the program isn't adhered to, then the offset doesn't actually occur.

The Most Reliable Offset Program

The most reliable offset program is one that actually sucks CO2 out of the air. These programs can verify the offset the most accurately. 

The reason why these programs are not more popular is simply because they are more expensive per ton of CO2 offset. This means that in the Carbon Offset market, the demand for a reliable program like carbon capture factory is lower than something like a forest preservation program. 

The Open Market Problem

Buyers in the Carbon Offset Market will, like in other markets, choose the cheapest option to offset their emissions. 

This choice means that cheaper, less reliable, less verifiable programs like forest protection programs become the most commonly purchased type of offset. 

Whether more regulation or requirements for a carbon offset program to exist is the right solution is debatable, but it is clear that the current state of the market favors less reliable types of carbon offset programs.