A carbon offset is used as a tool to define a decrease in greenhouse gas emissions. In general, carbon offsets can be measured in metric tons based on the total amount of carbon dioxide (or a similar gas) that is reduced. Most institutions will base a single unit of carbon offset decrease on a decrease in a greenhouse gas equal to a single metric ton. This tool is valuable in setting limits for companies that regularly release greenhouse gases as part of production.

Who Uses Carbon Offsets?

These offsets are normally purchased by such organizations to literally offset the effects of their production with similar prevention and repair methods. For example, in the year 2006, about $5 billion in carbon offsets was purchased by markets to offset a total of 1.6 billion tons of greenhouse gases.

Categorizing Carbon Offsets

In general, carbon offsets are given several key attributes to place them in categories. These attributes are as follows:

Year: The specific year when the carbon offset was implemented.

Source: The process or tool used in the carbon offset. Such tools could include land use, renewable energy, energy efficiency and bio-mass.

Certification: The certifying tool used to verify and log the carbon offset. Certifying entities include the Chicago Climate Exchange and CDM Gold Standard.