Education Center

What are carbon offsets?

Carbon offsets are projects that negate, or offset, the production of  greenhouse gas emissions in one part of the world with corresponding reductions at another location.  Examples of offset projects include renewable power sources like wind or solar that replace gas or coal fired power plants, energy switching like changing from incandescent to compact fluorescent light bulbs, and voluntary reductions in CO2 emissions by participating companies.  In order for a carbon offset to be legitimate, it has to meet a strict additionality test.  This means that a project cannot be counted as an offset unless it would not have been undertaken without the additional revenue that comes from carbon offsets.  A good example of this might be an energy reduction project at a manufacturing plant.  Without offsets, the plant's owner may find that the project cost more than the savings it produced and decide not to proceed.  The ability to sell offsets for the energy saved, however, may make the project economically viable and the company would proceed with the plan.  If, on the other hand, the energy reduction project was already viable without offsets, it would not be eligible under the additionality standards.   

Why do we need them?

Ideally everyone would be able to voluntarily reduce their greenhouse gas emissions to a sustainable level.  However, some greenhouse gas reductions are more costly than others.  For example, while a wind farm is a suitable substitute for a coal fired power plant, current technology makes zero emission transportation of packages unrealistic.  The offset system allows you to neutralize the impact of shipping your package while still allowing you to use the available transportation infrastructure.  OffsetYourShipping goes even further by offsetting a full 5 lbs of CO2 for each dollar you spend, far more than that generated by shipping your package.  This will drive a net reduction in global greenhouse gas emissions. 

How do I know these offsets are real?

InClime LLC, OffsetYourShipping's parent company, is an Exchange Participant on the Chicago Climate Exchange.  This allows us to purchase tradable Carbon Financial Instruments directly on the exchange, with each contract representing 100 metric tons of CO2 emissions.  We then retire these offsets.  The Chicago Climate Exchange performs rigorous certification and third party verification of offset projects.  They also keep detailed records of all offset activity, allowing confirmation that the offsets actually occurred.