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What are offsets?

Environmental offsetting enables a company, country or individual to be legally or morally allowed to pollute or otherwise damage the environment as long as they pay someone else somewhere else to attempt to compensate for some or all of the negative consequences. The most common offsets are carbon offsets and biodiversity offsets, but there have been discussions about introducing ecosystem and even cultural offsets.

This section focuses on carbon offsets. To read more about biodiversity or other offsetting visit

What are carbon offset projects?

Carbon offsets create carbon credits which businesses, countries and individuals can buy to compensate for emissions reductions they would otherwise have to make. Carbon offsets are a key part of most existing and planned carbon trading schemes, though they have now been ruled out of the EU Emissions Trading System from 2020 onwards. Carbon offset credits can be bought voluntarily by those wishing to assuage guilt or show their green credentials, but the majority are bought by businesses and governments legally bound to reduce their emissions, or by governments seeking to strengthen the carbon trading market.

Carbon offsetting in general has a number of systemic flaws, most of which are dealt with in Fern’s report Trading Carbon. How it works and why it is controversial and briefing Designed to Fail. Carbon Trade Watch also outlines a number of offsetting projects that have intended and unintended negative consequences.

Forest carbon offsets are particularly problematic as forest carbon sinks can easily become carbon sources. Carbon dioxide through deliberate human activities such as intensified forest harvests and changes in land use, as well as natural events such as pest infestations, diseases and forest fires. Other concerns unique to forest carbon offsets are the impossibility of measuring the amounts of carbon being stored and sequestered by forests. For more information about the problems with forest carbon offsets see Carbon Discredited: Why the EU should steer clear of forest carbon offsets and Counting the cost: forest credits and their effect on carbon markets.


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