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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 www.fern.org/biodiversityoffsetting.

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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Most recent publications

Trading carbon: how it works and why it is controversial

In the drive to tackle climate change, carbon trading has become the policy instrument of choice among governments. It is also a central element of the UNFCCC’s Kyoto Protocol. National or regional carbon trading schemes are now operational in Europe, the USA, New Zealand and elsewhere.

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PDF iconOPEN1.84 MB

Forestwatch Issue 145 and Copenhagen Special

  • EU Member States reject prohibition of the sale of illegal timber
  • NGOs reject Ecolabel for copying and graphic paper
  • Will Europe follow America’s ECAs in reducing GHGs
  • Integrated Product Policy and Beyond
  • Member States’ support binding biomass criteria
  • Copenhagen Update (Available in French and Spanish)

Why Congo Basin countries stand to lose out from a market based REDD

This briefing paper unravels the implications of setting a historical baseline with a correction factor for low deforestation countries. It also explains why carbon markets are unlikely to raise the anticipated funds for forest protection, due to the unsuitability of applying these policy mechanisms to forests, and why any funds raised are unlikely to reach Central Africa or other regions with low deforestation rates and weak governance.

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PDF iconcongo basin countries lose out.pdf266.55 KB

Forestwatch Issue 144 and update from Barcelona

  • Climate, energy and environment change
  • A binding forest agreement?
  • Biomass: binding sustainability criteria needed
  • FERN.org relaunched
  • First US illegal timber investigation
  • EU ratifies Ghana VPA
  • Palm oil funding frozen
  • Update from UNFCCC Barcelona meeting
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PDF iconFW 144 December 2009213.17 KB
PDF iconBarcelona update118.32 KB

Forestwatch Issue 143 November 2009

  • EU Council reaches a troubling conclusion
  • Flawed bioenergy policies will fail EU forests
  • CAR VPA negotiations calendar ambitious
  • CDM to open doors to large scale plantations
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PDF iconFW 143 Nov 2009.pdf212.16 KB

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