Buying Offsets

Offset Prices

There is no single market for carbon offset credits. Instead, there are multiple markets, largely corresponding to different carbon offset programs, each of which issues its own “brand” of offset credit (see Sticking to Lower-Risk Project Types). Generally, offset credits from one program are not interchangeable with those from another. Although there are some trading exchanges that facilitate offset credit transactions, most transactions occur off-exchange, making price discovery difficult. Prices for offset credits can range from under US$1 to well over US$35 per credit.

Prices can vary by an order of magnitude depending on the program, its requirements, and, perhaps most importantly, the markets in which the offsets are sold. Prices for offset credits vary significantly based on the standards used, project types, project locations, offset quality, delivery guarantees, and contract terms. Some of these factors, like project type, can have a large impact on offset price, while the offset program selected, is less likely to significantly impact the price when the project type and other factors are held constant.

There is also price variance if purchasing under a compliance obligation or if voluntarily buying offsets. Compliance buyers are interested in obtaining credits reliably and cheaply to fulfill their regulatory requirements. Most institutions that voluntarily use offsets for their climate neutralization efforts want to communicate that effort to the public and choose projects that are anticipated to be well-received by the target group – typically seeking projects with charismatic co-benefits. For an overview of voluntary carbon offset markets, transaction volumes, and market prices, see Ecosystem Marketplace’s annual State of the Voluntary Carbon Markets report.

There are no readily available metrics for consumers to determine either how the price of offset credits sold in the voluntary market is determined and whether price corresponds with higher environmental integrity, see Weaker Methods: Relying on Price or Vintage for further discussion.