4 Most Popular Types of Carbon Offset Programs in 2021 (Best Providers)

By Georgette Kilgore | Updated on August 18, 2021

Thinking about buying a carbon offset to reduce your carbon footprint? Great! Purchasing carbon offsets is easier than it has ever been before, but finding a high-quality provider … that’s a different story. You have to be careful.

In this guide, we review the top, most popular types of carbon offset programs, comparing wind, solar, methane capture, and forestry projects. By the end, you’ll be able to buy a personal carbon offset that suits your needs, and your desire to live a more eco-friendly lifestyle.

8 Billion Trees graphic image of wind turbines and solar panels with a body of water in the middle separating two hills connected by a red bridge and a factory in the far right spilling fumes into the air

Click here to jump to the best carbon offset providers of 2021

What are Carbon Offsets and How Do Carbon Offsets Work?

Offsets are purchased by individuals and companies to “balance out” their greenhouse gas emissions (GHG). Basically, carbon offsets are used to erase the emissions generated by individual activities, like taking a weekend road trip or flying to Mexico and back on a commercial airplane. In fact, almost everything we do, from charging our smart devices to owning a pet, generates CO2. But, offsets can be purchased for specific amounts of carbon pollution too, as is the case with large companies and big construction projects.

When you buy a carbon offset, your money becomes an investment in a clean energy project or ecological initiative. These projects work to either prevent or sequester carbon emissions, and your money translates to an emissions reduction equal to what you purchased.

Q: Are Carbon Offsets the Same as Carbon Credits?

Contrary to popular belief, Carbon Offsets and Carbon Credits are not the same things. Carbon Credits (sometimes known as Carbon Compensation) are permits that a company can buy, sell, or trade, which allows it to emit a certain amount of carbon dioxide. Carbon Credits are a big incentive for companies to reduce their CO2 ¬emissions because they can then sell their extra credits for a profit. Increasing the price of carbon credits is one way to further incentivize CO2 reductions.

However, offsets are used to eliminate the emissions already produced. These can be purchased by individuals or businesses, and their flexibility and positive impact on the planet are effective in helping lower your footprint.

Top 4 Most Popular Types of Carbon Offsets Explained and Examples of Each

There are four primaries (most popular) ways that are working to erase CO2 emissions from our atmosphere. While these projects are the most common, there are countless sub-types of carbon offsets other than these four categories.

1. Renewable Energy

If a green energy source is going to be considered renewable, then it must be able to be replenished on a human time scale. Because these energy sources can be replenished, renewable energy programs work to divert energy reliance from GHG emitting fossil fuels.

For the most part, renewable energy projects are supported by Renewable Energy Credits, which are similar to carbon offsets but are measured by kilowatts of electricity, not tons of carbon. These projects include:

Wind

Over the last few decades, wind energy turbines have emerged as a reliable, affordable source of clean power. As more wind turbines go up, our reliance on coal-based electricity goes down. The proliferation of federal Wind Energy Funding Opportunities1 has helped large-scale wind projects get started all over the globe.

Solar

In terms of both affordability and energy efficiency, solar power is already having a strong, positive impact on climate change. Every kilowatt that is generated from a solar plant prevents just a little bit of coal-fired CO2 from leaking into the atmosphere.

Hydroelectric Power

The viability of hydroelectric power was embraced long before solar, wind, or biofuel. That’s because there’s no arguing with the sheer power of water on the move. Large electric turbines like those at the Grand Coulee hydroelectric dam in Washington state are capable of generating serious amounts of power. Moreover, entire systems like the Tennessee Valley Authority harness the power of water to provide electricity to a large portion of the Southeast.

Biofuel

Biofuels have actually been around for a long time, but until recently, gasoline and diesel fuels have just been cheaper to make. But when you combine rising oil prices with the worst effects of climate change, it’s easy to see why Biofuel is making a big comeback. The Vermont Bioenergy Initiative2 is a good example of a local renewable energy project focusing on biofuel.

2. Methane Capture & Combustion

A lot of people don’t know it, but methane has an even greater global warming potential than CO2 over a longer period of time. Landfills and wastewater plants are the primary sources of methane emissions, which is why most methane capture and combustion projects happen on-site.

Methane capture and combustion projects can be expensive to start. The Mains Family Farm Project3 is a good example of small-scale methane capture and combustion program that generates 74KW of electricity.

3. Energy Efficiency

Simply put, the less energy we use, the less we have to rely on fossil fuels to keep the lights on. Energy Efficiency projects use carbon offset funds to make systems, buildings, college campuses, and even entire towns run as efficiently as possible. This method is carried out in countless ways, but some of the most popular include:

Cogeneration

Cogeneration is the ability to take one fuel source, and turn it into two types of energy. In most cases, this involves using turbines to turn natural gas into both electricity and thermal energy. The Central Utilities Plant at MIT is a great example of a cogeneration project, preventing over 68,000 metric tons of CO2 emissions every year.

Fuel & Efficiency

Simply put, fuel efficiency projects are designed to make a specific type of fuel or energy source last longer. Offset funding can be used to make residential homes more efficient, whether it involves electricity or natural gas.

Energy Efficient Construction

New home and commercial construction is a significant source of greenhouse gas emissions, through every stage of the process. Carbon offsets for energy-efficient construction allow homeowners to comply with the U.S. Department of Energy’s Energy Efficient Home Design standards to reduce the project’s overall carbon footprint.

4. Forestry

For capturing and storing CO2, nothing does the trick quite like a good old-fashioned tree. Carbon offsets are available to purchase for a variety of forestry programs, including:

Afforestation

Afforestation involves planting trees in an area where no previous tree cover existed. While each new tree planted can pull more CO2 out of the atmosphere, careful attention has to be paid to biodiversity, to prevent these “new” forests from falling victim to disease or inadvertently damaging existing ecosystems (preventing invasive species).

Reforestation

Reforestation is one of the most effective carbon projects being used to fighting global warming. That’s because we’re losing over 200,000 acres of rainforest EVERY DAY to deforestation. These lost ecosystems once held a lot of CO2, but once they were slashed and burned, that carbon was released back into the atmosphere, and the trees were gone. Reforestation projects are dedicated to returning some balance to the equation by replacing what was lost and restoring vital ecosystems to the planet.

Avoided Deforestation

One way to prevent additional GHG emissions is to save the forests currently holding that carbon and providing homes for countless creatures and plants. Some offset programs use funds to purchase or lease forest areas that were otherwise due to be cut down by local landowners. This is sometimes called “saved” carbon.

Carbon Footprint Calculator: Find Out How Much Carbon You’re Responsible for

Ever wonder how much carbon emissions you are responsible for on a daily basis? Our Carbon Footprint Calculator will not only estimate your total carbon footprint but also provide you with direct links to purchase a carbon offset for that amount.

8 Billion Trees graphic image of scale with carbon producing activities on the left side with illustrated with images of a plane, car, and hotel followed by carbon eliminating activities(carbon offsets) on the right side with a wind turbine, solar panel, and trees

Finding the Best Carbon Offset Providers & How to Buy

Once you know how much greenhouse gas emissions you’re generating, you can start comparing offset providers.

Even if you already know which carbon offset program you’re interested in, we encourage you to read our comprehensive Guide to Carbon Offsets. You can learn more about how to research providers, and how to double-check that your purchase power is actually making a difference for the planet.

Types of Carbon Offsets: Quick Q & A

Q: Are Carbon Offsets Effective at Mitigating Global Warming?

A: While not all carbon offset programs work as well as they should, high-quality CO2 offsets purchased from reputable providers can have a significant impact on reducing and eliminating greenhouse gas emissions.

Q: Do Carbon Credits Work?

A: For the most part, industry experts agree that cap-and-trade carbon credits provide a real, bottom-line incentive for companies to reduce their emissions.

Q: What is the Price of Carbon Offsets?

Carbon offsets are not as expensive as you might think. Depending on the provider, they can be as little as $10 per month.

Benefits of Offsetting Carbon Through Planting Trees

We firmly believe in the offset missions and principles of the organizations linked above, but forestry projects do more than eliminate CO2. Of course, reducing man-made carbon emissions is our #1 goal but our efforts in the Amazon rainforest also help reverse humankind’s ecological debt or the “consumption of resources from within an ecosystem that exceeds the system’s regenerative capacity.”

This means it’s important to consider if the carbon offset projects you support simply cancel out your carbon emissions, or if it has also contributed to the planet’s long-term survival, rebuilding forest ecosystems and habitats for endangered wildlife–at the same time, it eliminated CO2.


References

1Office of Energy Efficiency and Renewable Energy. Wind Energy Funding Opportunities . Ed. Wind Energy Technologies Office. 2021. Web. 16 April 2021. <https://www.energy.gov/eere/wind/wind-energy-funding-opportunities>.

2Vermont Bioenergy Initiative. Local production for local use is the ‘biofuel’ model that works in Vermont. 2013. Web. 16 April 2021. <http://vermontbioenergy.com/local-production-for-local-use-is-the-biofuel-model-that-works-in-vermont/#.YDWZb3llBEY>.

3Native, a Public Benefit Corporation. Mains Family Farm Project. 2021. Web. 16 April 2021. <https://native.eco/project/mains-family-farm-projecthb/>.