Frequently asked questions: How do carbon offsets work?

A carbon offset is a certificate representing the reduction of one metric ton (2,205 lbs) of carbon dioxide emissions, the principal cause of global warming. Although complex in practice, carbon offsets are fairly simple in theory. If you develop a project that reduces carbon dioxide emissions, every ton of emissions reduced results in the creation of one carbon offset. Project developers can then sell these offsets to finance their projects.

There are hundreds of different types of carbon reduction projects. For example, a wind farm generates clean energy, which reduces carbon emissions from coal-burning power plants. In order to finance its operations, a wind farm can sell these reductions in the form of carbon offsets.

Your “carbon footprint” represents the sum total of all the greenhouse gases you personally are responsible for putting in the atmosphere. The term carbon footprint is named after carbon dioxide, the principal cause of global warming.

Whenever you use energy created from fossil fuels such as oil or coal, you’re generating carbon emissions. Common activities that add to your carbon footprint include:

• Driving
• Flying
• Home heating and cooling
• Electricity use

The products you buy also contribute to your carbon footprint, because energy was required to create and transport them. To estimate your carbon footprint from various activities, use our carbon calculator.

TerraPass carbon offsets cost $5.95 per 1,000 lbs of carbon reductions. This price is the same across all of our products. Some products may carry an additional charge to cover the accompanying gift.

Our offset prices are determined by the underlying cost of the carbon reduction projects we fund. We strive to bring you the highest quality offsets at the lowest possible prices. Although you may be able to find lower-priced offsets from some vendors, those offsets typically do not meet TerraPass’ quality criteria or standards for verification.

TerraPass brings together the purchases of all its members, which gives us substantial financial leverage. The key idea behind TerraPass is that we help tip the balance to make carbon reduction and clean energy projects pay off, reducing greenhouse gas emissions at low cost.

For example your TerraPass purchase provides the additional money needed to make a wind energy plant cost-competitive with a coal-fired plant. For more details on the projects we’ve funded and an overview of our methodology, please visit our projects page.

TerraPass carbon offsets helps you mitigate your own contribution to global warming by funding greenhouse gas reductions. Of course, fighting climate change begins with conservation. Drive as fuel-efficient a car or truck as possible. Reduce your driving by carpooling, bicycling, or using public transportation. Cut back on plane travel. Lower your thermostat.

But most people will still have a carbon footprint. With TerraPass carbon offsets, you can balance out 100% of the emissions you can’t eliminate through conservation.

TerraPass funds clean energy from sources such as wind farms through the purchase of Renewable Energy Certificates (RECs). RECs are similar to carbon offsets in some ways — both are financial instruments that represent a quantifiable environmental benefit. But because RECs represent clean energy production, they are denoted in terms of electrical power (megawatt-hours) rather than in tons of carbon dioxide. Each REC represents one megawatt-hour of clean energy production.

Clean energy from sources such as wind farms reduces carbon emissions by lowering the proportion of grid electricity derived from dirty fuel sources such as coal and natural gas. In order to determine exactly how much carbon dioxide is reduced from a purchase of RECs, we first need to know the average amount of carbon per megawatt-hour of conventional electricity. This figure varies by region, because every geographical area uses a slightly different mix of fuel sources to create electricity. If you live in the U.S., you can use the EPA Power Profiler to find the carbon impact of your own electricity.

Using a similar database, TerraPass calculates the displaced fossil fuel use from every REC we purchase. This is the standard method used to make carbon reduction claims from RECs.

No. Trees are a beautiful and vital part of our environment. However, they are problematic as a source of carbon offsets. Chief among the problems is the timing of the carbon reductions that result from tree-planting projects. If you plant a tree today, it may take up to 100 years to achieve full size. 100 years is too long to wait to address a global warming problem that is already affecting us today.

A number of reputable organizations are working to develop high-quality offsets from projects that involve protecting forests that already exist. If these organizations are successful, such “avoided deforestation” projects could be a beneficial way to reduce atmospheric carbon and preserve threatened ecosystems. TerraPass is closely monitoring these developments.

Yes. Every TerraPass carbon offset project is published on our web site at the close of our audit cycle. We publish the project location, project type, and amount of carbon offsets purchased from each project.

Additionality refers to the concept of whether your carbon offset purchase really brings about carbon reductions, or whether the reductions would have happened anyway. If the purchase of carbon offsets is a critical factor in making the reductions happen, the reductions are said to be “additional” to the business-as-usual case.

Additionality is an important feature of high-quality offsets. To ensure that TerraPass offsets are additional, we apply a number of quality metrics to our projects. We evaluate them prior to every purchase, we require that they adhere to third-party additionality standards, and we subject our own purchasing history to an external audit.

TerraPass is a strong proponent of quality standards in the voluntary offset market, and we participate actively in the standards development effort.

Yes. Methane is one of the greenhouse gases officially recognized by the Intergovernmental Panel on Climate Change as a major cause of global warming, along with carbon dioxide and four others. Methane comes from a variety of sources both natural and manmade, such as farm waste and landfills.

All of the six major greenhouse gases are typically converted into their “carbon dioxide equivalent” for ease of comparison. For example, methane is 21 times as powerful a warming agent as carbon dioxide, so we multiply methane reductions by a standard factor to calculate their carbon dioxide equivalent.

The reduction associated with each TerraPass purchase is stated in pounds of carbon dioxide, but we’re really talking about carbon dioxide equivalents. In fact, all carbon offsets are denominated this way.

This web site is a good start. We have a section where you can learn about carbon offsets. The David Suzuki Foundation also has some good information, and this Wikihow page on how to choose an offset provider is nice and concise.

When you purchase a TerraPass, we buy the carbon offsets on your behalf and remove them from the market so they can’t be traded or resold. By removing them, we ensure that the reductions are permanent — they can never be used by another entity as a permit to pollute. You never actually take ownership of the carbon offsets themselves. But you do get a nice gift!

No. The climate advocate’s mantra is that whenever you have a choice of two solutions, the answer is always both. Conservation is an essential way to reduce carbon dioxide emissions, particularly in the near term when we are making the switch over to clean energy sources.

But it is difficult to eliminate all your carbon emissions through conservation. That’s where TerraPass comes in. If you still fly, drive a car or buy electricity and natural gas for your home, we can help you take responsibility for your global warming impact by balancing out your remaining carbon emissions.