Carbon Offsets

A carbon offset is an intangible asset representing the avoidance or the sequestration of greenhouse gas (GHG) emissions, which can be purchased to counterbalance or compensate for nations’, organizations’, or individuals’ (parties’) own emissions. Renewable energy, forestry, and other projects can generate offsets. Offset use has become widespread since the late 1990s as efforts to prevent climate change and demonstrate responsibility on this front have increased. Demand for offsets result from both governmental policies and discretionary action. Criticisms of the validity and appropriateness of offsets have led to the development of organizations that promulgate and oversee the standards governing and certifying offset projects.