What is a Carbon Offset?


In case you haven’t noticed, the climate crisis is getting out of hand.

Many people have been searching for potential solutions that could help fight the harmful effects associated with our changing climate. The recent shift in sustainability has boosted awareness about the worsening state of our environment, economy, and society and led innovators to develop a system for environmental accountability. Currently, the most promising solution within that system is a carbon offset.


A carbon offset is a certificate that represents the reduction or removal of harmful emissions.

One offset is issued for every one tonne of carbon pulled from the atmosphere.

It’s important to note that a carbon offset differs from a carbon credit, another standard tool used to further sustainability efforts.

Quick History

Offsets were born in 1997 when world leaders gathered to address the issues with our climate. The result was the Kyoto Protocol, an agreement that aimed to limit how much greenhouse gas developed countries are allowed to emit. Part of this agreement was the creation of carbon markets.

Today, carbon offsets have evolved to become more impactful. Advances in technology and a greater focus on the humanitarian impacts have led to higher quality offsets. The current industry standard includes SDGs and other additional certifications. These metrics highlight the extra benefits of buying and creating offsets.

In the early stages, plenty of bad actors misrepresented the practice and took advantage of the market. Like any industry, carbon offsets have their faults, but today's standards are much more impactful and regenerative than before.


Three easy steps describe the path of a carbon offset:

  1. Sustainable entities called projects generate carbon offsets, which range from individual efforts to large-scale operations.
  2. Buyers who wish to counter the effect of their emissions purchase offsets. The money the projects receive goes toward funding new environmental initiatives.
  3. Finally, the offsets are retired and permanently removed from the open market. Retirement ensures that nobody gets credit for reducing emissions that somebody else already reduced.

At each step of this process, an independent third party, called a registry, ensures that each carbon offset is legitimate and generates real climate action.


The term “carbon offset” may not be in everyone’s vocabulary yet, but in recent years, there has been a rise in demand for them. As the world continues to grapple with climate change, businesses turn to carbon offsets to reduce their impact on the environment, leading the carbon offset market to grow past $1 billion in 2021. As the climate crisis worsens, many analysts expect this market to grow exponentially shortly.

Despite the boom, not everyone is convinced about the carbon offset market. The market currently operates with a flawed model, preventing the market from scaling to the level required to slow the effects of the climate crisis. Fortunately, there are solutions to this problem, giving us hope for the future of offsets and the world.


A carbon offset represents reducing or removing harmful emissions from the atmosphere. Across the world, from individuals to corporations, offsets have become a popular way to mitigate detrimental climate impact and drive financing away from its current flow and towards climate-positive action. The climate crisis is incredibly complex, and while offsets don't represent a perfect solution, they represent progress.

If you’re interested in getting involved or want to learn more, feel free to visit carbonlink.io