Understanding Carbon Offsets

Distilled Emission Reductions Considerations

A variety of options are available to organizations to claim or purchase GHG emissions reductions if they deem achieving their GHG reduction target through internal reductions as too difficult. But, not all these options are equal in their effectiveness and environmental integrity.

The findings in this guide are based on researched evidence. This evidence suggests that several commonly used instruments – including voluntary renewable energy certificates (RECs), green power purchases (PPAs), and energy efficiency certificates (EECs) – should be avoided by organizations whose primary goal is to achieve credible and quantifiable GHG reduction targets.

Voluntary carbon offsets are a viable instrument to reduce emissions, but due diligence is recommend to understand project risks and select appropriate options. Voluntary cancelation of emission allowances may be an effective option, provided the selected ETS market is not oversupplied (with allowances). Prospective buyers are advised to perform analysis to determine allowance supply within selected markets prior to making a purchase.