Sustainability Blog

In 1997 the European Union and 83 other signatories agreed to the Kyoto protocol.  When it went into effect, the Kyoto protocol mandated that agreeing parties reach emission reduction targets to reduce greenhouse gases.  Although the success of the Kyoto protocol was limited, many view it as an important first step in international policy for addressing climate change.  One direct result of the protocol was the creation of a formal international market in the European Union for carbon offsets to achieve emission reductions.  The emergence of a market for carbon offsets in the US has been mostly voluntary.  

Carbon offsets are defined as a designated reduction in emissions of greenhouse gases made to compensate for emissions made elsewhere.  For instance, UPS allows customers to pay an additional fee when shipping a package to compensate for their contribution to greenhouse gas emissions from the combustion of fuel over the course of transportation for that package.  That fee then goes towards funding a project that will offset greenhouse gas emissions, such as methane capture at a landfill or growing a forest in an effort to make the transportation of that package “carbon neutral”.  UPS partnered with the Garcia River Forest as part of their Carbon Neutral Shipping program.  The Garcia River Forest in California pursued and received verification by the Climate Action Reserve, Forest Stewardship Council, and the Sustainable Forestry Initiative to become a viable option for carbon offset investment.

Carbon offsets should not be confused with Renewable Energy Credits (RECs).  Carbon offsets are designed to offset atmospheric carbon emissions while RECs are designed to generate renewable energy.  REC’s are measured in megawatt-hours of energy generated from renewable sources while Carbon offsets are measured in metric tons of carbon dioxide offset.  Overlap and confusion occurs when carbon offset projects include renewable energy generation.  There are many different standards and certifications recommended for carbon offsets due to the difficult nature of measuring the removal of metric tons of carbon dioxide from the atmosphere.  In addition, carbon offsets must be proven to fund a project that goes beyond “business as usual” scenarios.  For example, if a utility has plans to install a methane destruction plant with funding already secured, they do not qualify for additional funding from carbon offsets.  Securing a REC is more straightforward since calculating megawatt-hours generated from renewable sources is more easily quantifiable.