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Carbon Offsets and Renewable Energy Certificates

Carbon Offsets and Renewable Energy Certificates

If you spent some time reading through environmental programs and sustainability reports of various organizations, you may have encountered the terms ‘carbon offsets’ and / or "renewable energy certificates" (also called RECs). Although it is not unusual to see these two terms used sometimes interchangeably to describe a way for organizations to lower their greenhouse gas emissions, they refer to two distinct instruments with important differences. Here is what you should know and how you can use them to neutralize your personal carbon footprint!

Carbon Offsets

Many organizations are now managing their carbon footprint using greenhouse gas (GHG) emissions inventory, following a standard set of accounting guidelines to measure carbon emissions associated with their operations, energy purchases, and supply chain. Once they calculated their total GHG emissions, organizations can purchase verified emissions reductions, or offsets, generated by external projects with a net positive carbon budget. These projects can include investments in landfill gas-to-energy facilities, wind farm projects, co-generation power plants, and forestry projects aimed at avoiding deforestation / funding reforestation. All resulting emissions reductions from a project must be real, permanent, and verified by a third-party. Once purchased, an organization can subtract these carbon offsets from its organizational emissions to determine its net GHG emissions. Carbon offsets are measured in metric tons of CO2 or CO2 equivalent.  

Renewable Energy Certificates (RECs)

RECs are used to address GHG emissions associated with electricity purchased by an organization by verifying use of zero- or low-emissions renewable sources of electricity. Each REC conveys the environmental attributes associated with 1 MWh of a zero- or low-emission sources such as wind, solar, hydro or renewable biomass. By purchasing a REC, an organization receives the rights to those environmental attributes and can make claims associated with its renewable origin. RECs are popular instruments to achieve clean energy goals and support the renewable energy market.

In short, both carbon offsets and RECs are associated with environmental benefits of actions that can help reduce GHG emissions. One carbon offset represents one metric ton of reduced GHG emissions whereas one REC represents the environmental attributes of 1 MWh generated by renewable sources.

Offset your own individual footprint!

Carbon offsets are not limited to businesses or large organizations. Individuals can also purchase offsets to reduce or eliminate GHG emissions associated with their own carbon footprint. The average American’s carbon footprint including home, car, air travel, and diet is about 50,000 pounds a year (24 metric tons of CO2)! Nonprofit organizations such as Carbonfund.org offer the possibility to purchase individual or family annual offsets. Many others such as the Global Footprint Network also provide access to carbon footprint calculators for you to identify the main sources of your carbon footprint based on your living habits. Some results may surprise you!

Go lessen your carbon footprint: measure it, reduce what you can, offset what you can’t!