Carbon Offsets Are an Emissions Solution, but Not the Only One

By Swetha Sekhar
January 29, 2024
3 min read

Carbon offsets are a cost-effective way for a company to reduce its emissions by paying to invest in green projects such as methane capture, reforestation, and green energy initiatives, which gives them carbon credits to “offset” the emissions they produce.

Pros of Carbon Offsets
1. Offsets help combat climate change

Since the money from carbon offsets goes into green initiatives, there is less carbon being produced elsewhere due to the money being spent, which therefore slows down climate change.

The money from carbon offsets also often goes to research and development for environmentally friendly products and green technology, which then accelerates innovation in both areas. This means that there will be more solutions to environmental issues available faster, accelerating the initiative to be eco-friendly as a society and for each business.

2. Offsets help companies account for their GHG emissions

All companies have some sort of carbon footprint. While companies can (and should) reduce their footprints, they will never be able to reduce their emissions to zero. Carbon offsets allow companies to reach net-zero, so companies can account for the greenhouse gas emissions they cannot reduce any further.

3. Eco-friendliness can become more aligned with profit maximization

Carbon offsets allow companies to pursue carbon-neutrality and other eco-friendly initiatives without sacrificing their bottom line and profit margins. Since some types of offsets are actually investments, companies can receive a return on their investment, which would mean investment profits would be added to the company’s revenue stream.

4. Companies can improve their image and their carbon footprint

Carbon offsets help companies achieve carbon-neutrality, which is a hallmark of eco-friendliness. It means that the combination of emissions reductions and offsets has made their carbon footprint net-zero, which means that the company has either eliminated or offsetted any emissions it produces, indicating a sustainable business model. Therefore, it is in a company’s best interest to buy carbon offsets when there is nothing more that can be done otherwise to achieve carbon neutrality.

Cons of Carbon Offsets
1. Lack of transparency from carbon offset companies

Depending on the company, some offsets are difficult to figure out how much of the money went towards the actual offset project and where the project even took place. There are allegations that more of the money has gone to the companies themselves or to relatively ineffectual green initiatives. Therefore, customers should be wary of the type of offsets they buy, and a clear understanding of what is actually happening with the money paid for the offset. Companies selling offsets should be vetted for transparency and trust, like Pachama.

2. Offsets don’t solve the actual problem

If your bathtub was overflowing, you wouldn’t first grab a mop. You would turn off the tap. Environmentalists use this metaphor to explain why carbon offsets cannot be the only solution. Carbon offsets are the mop, a tool to help clean up. But they can’t be effective if the water is still running, or if global emissions are still climbing. Carbon offsets create a loophole where companies that exist on fossil fuels (such as Avis, a car-rental company) can call themselves carbon neutral without making any commitments to move away from gas-powered vehicles. Carbon offsets are a great way to come to carbon neutral when there’s nothing else a business can do to reduce carbon emissions. However, this is just a temporary solution, and companies should continue to invest in finding ways to further lower their carbon emissions.

Want to know more about carbon offsets in terms of your business? Request a demo from Ecolytics today! We partner with the carbon offset company Pachama to provide custom recommendations for carbon offsets to each client, as well as providing a wealth of other recommendations to help clients build a more sustainable business model. To keep up with us, follow our social media accounts linked below!

Ecolytics newsletter
No spam. Just the latest releases and tips, interesting articles, and exclusive news in your inbox.
Read about our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
More posts

Ready to see how Ecolytics will transform your company?

Request demo
Join our newsletter to stay up to date on features and releases.
We care about your data. See privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
© 2024 Ecolytics. All rights reserved.