The effects of climate change have become more evident and there have been growing calls for actions from the governments and organizations to tackle the risks of climate change. The Paris Agreement target set to limit temperatures rising above the 1.5℃-2℃ signifies the efforts aimed towards achieving a Net Zero emissions world1 .
Carbon offsetting involves the process in which organizations compensate their emissions by funding projects that reduce emission in another place. Carbon offsets are represented as units of one ton of CO2. It offers a way to balance out organizational pollution by investing in projects that reduce greenhouse gas emissions (GHG). Carbon offsetting allows organizations to contribute to the environment especially when their emissions cannot be avoided.
There are two types Carbon Offsets:
- Avoidance offsets: – these are generated by projects that reduce future emissions through prevention e.g., building a wind farm instead of new natural gas energy.
- Removal offsets: -from projects that extract carbon from the atmosphere. Technologies for removal offsets include; Nature-based solutions which involves managing ecosystems e.g., forests, mangroves etc. or Mechanical removal of carbon dioxide which Involves use of technologies to extract carbon dioxide from the atmosphere.
Carbon offsets represent a transition to achieve Net Zero emissions. One of the benefits of carbon offsets is that it offers increased funding to projects and direct financing to climate action. Carbon offset credits can be traded on the carbon market. Verified carbon offsets are an emerging investment area for businesses and individuals looking to protect the environment.
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