Carbon Offsets Explained

At South Pole we see climate change as a puzzle, as with any puzzle there are multiple pieces that fit together in order to complete the picture. The most important part has to be reducing emissions, however, one important piece is carbon offsetting - sometimes called carbon credits. Put simply, one carbon credit is equal to one tonne of CO2 being removed from the atmosphere.

Reducing global emissions, enhancing livelihoods and protecting the planet

  • From taking an international flight to producing raw materials to buying a morning coffee. As businesses and as individuals we generate unavoidable greenhouse gas emissions.
  • The choices we make have an impact on the size of our carbon footprint and many of us are reducing where possible. This can include switching to renewable energy instead of fossil fuels, taking public transport instead of driving or divesting from carbon-intensive industries.
  • But for what we can't reduce, businesses and individuals can compensate for their unavoidable emissions by financing emission reduction projects around the world – a practice called "carbon offsetting".

Carbon offsetting FAQ

  1. How does carbon offsetting work?
  2. Why should the levels of carbon and greenhouse gases in the atmosphere be reduced?
  3. How do I know that the emission reductions are actually happening?
  4. What does additionality mean?
  5. Does it matter where in the world the project is located?
  6. What are the different types of Emission Reduction projects?
  7. Why invest in the climate?
  8. What impact does buying carbon offsets have?
  9. What impact has South Pole created through carbon offsetting?
  10. What are the other options available to complement carbon offsetting?

How does carbon offsetting work?

If you develop a project that reduces carbon dioxide emissions, every tonne of emissions reduced results in the creation of one carbon offset, or carbon credit. A carbon credit is a tradeable certificate that represents the avoidance or removal of one tonne of carbon dioxide emissions. Buying carbon credits means investing in emission reduction projects around the world – projects that require financing in order to take place.

At South Pole we ensure that our carbon offsetting projects reduce emissions while bringing a host of other positive benefits; they support multiple Sustainable Development Goals through improving community wellbeing, wildlife, livelihoods.


Why should the levels of carbon and greenhouse gases in the atmosphere be reduced?

Robust science has shown that increased levels of greenhouse gases in the atmosphere are driving global warming, which in turn creates extreme weather changes around the world. This increase in greenhouse gas levels is a result primarily of our burning of fossil fuels - coal, oil and gas. Under the banner of the UN and Paris Agreement, the world's countries have come together to declare that urgent action must be taken to lower emissions if we are to maintain a habitable planet that can support the world's population. Latest research emphasises that urgent action must be taken by everyone in order to safeguard some of the most vulnerable ecosystems and communities on the planet.


How do I know that the emission reductions are actually happening?

High-quality carbon credits adhere to a strict set of standards. You can check this by ensuring the projects you invest in are registered with a third-party internationally recognised verification standard, such as the Gold Standard, Verra's Verified Carbon Standard (VCS), Social Carbon and Climate, Community and Biodiversity Standards (CCBS), or standards verified by the UNFCCC. These standards also help highlight different benefits while ensuring that the project is real, verified, permanent and of course additional.

In terms of transparency, carbon credits are assigned serial numbers and are issued, transferred and permanently retired in publicly accessible emission registries, such as the Markit Environmental Registry and APX VCS Registry.


What does additionality mean?

This can often be the trickiest part of carbon offsetting to understand, but theoretically its very simple. It simply means that the project would not be able to be built or operate without the revenue from carbon credits.


Does it matter where in the world the project is located?

There are no borders in the atmosphere, levels of CO2 is an international problem, which requires an international solution. Therefore it does not matter where the project you are buying carbon credits from is located. Many of our projects operate in less economically developed countries, as there we are often able to create a bigger impact for the local community thanks to co-benefits and extra activities. For example, the Kariba project achieves its primary aim of protecting a vast expanse of forest on the shores of Lake Kariba, through training local people, providing alternative income streams, increasing access to safe water and empowering women, which at the same time significantly improves local livelihoods!


What are the different types of Emission Reduction projects?

Emission reduction projects reduce the amount of greenhouse gas in the atmosphere in at least one of three ways. The first avoids greenhouse gas emissions, for example replacing fossil fuel-derived energy with energy from renewable sources. The second removes emissions from the atmosphere, for example, planting more trees, which sequester - or capture - carbon from the atmosphere and store it in liquid or solid form. The third captures and destroys emissions, for example methane gas capture from wastewater.

South Pole has hundreds of different types of emission reduction projects, which cover the following areas:

Forestry and conservation

– including: reforestation, land restoration, forest protection and sustainable land management.

  • Kariba forest protection, Zimbabwe
  • Mamize nature reserve, China
  • Afognak forest carbon, USA
  • Restoration of degraded lands, Colombia
 

Renewable energy

– including: Hydropower projects, wind projects, solar power and geothermal.

  • Aura Solar, Mexico
  • Salavatli geothermal energy, Turkey
  • Mytrah wind power, India
  • Musi river hydro, Indonesia
 

Community projects

– including: improved cookstove technology, access to safe water.

  • Energy efficiency for women empowerment, Nepal
  • Access to Clean Water for Better Health, Cambodia
 

Waste-to-energy

– including: biogas from landfill and industry and biomass.

  • Everbright Landfill Gas, China
  • Biogas for greener farms, Switzerland
 

You can see a selection of South Pole's climate protection projects here.


Why invest in the climate?

We need to act now, with all the solutions available to us. We need to increase ambition and mobilise climate finance to lower greenhouse gas emissions drastically to reach internationally ratified targets such as the Paris Agreement and the Sustainable Development Goals (SDGs). Beyond the moral drivers, it is becoming an imperative for businesses to take action in order to continue their operations, for example building resilient supply chains and mitigating financial risks. Moving capital towards climate-smart solutions opens doors to many opportunities and can be a long-term growth driver.


What impact does buying carbon offsets have?

Carbon offsets have already reduced the amount of greenhouse gases in the atmosphere by more than 1 billion tonnes. This is the equivalent of taking around 213,000,000 passenger vehicles driven for one year. Actors in the voluntary market are continuing to explore ways to reduce emissions, particularly linking project activities to broader sustainability goals and collaborating with policy makers to make sure lessons learnt improve the market.


What impact has South Pole created through carbon offsetting?

Our award-winning solutions enable climate action for all. As one of the largest global project developers, we have developed over 700 emission reduction projects in renewables, forestry, agriculture, industry, households and public institutions, spanning the globe. With our clients support we have positively affected over 20 million people around the globe, saved over 170 million tonnes of CO2, enabled the production of more than 140,000 GWh of renewable energy, protected or restored over 55,000 km2 of land and helped create nearly 100,000 jobs in developing countries! Find out more here.


What are the other options available to complement carbon offsetting?

Becoming carbon neutral is an important step companies and individuals can take to help solve climate change but carbon credits should not be seen as a quick fix or license to continue practices that harm and pollute the environment. That's why the first option is always to reduce emissions as much as possible. Businesses must take a holistic approach and develop a broad sustainability strategy to guide their climate action journey. Following a greenhouse gas assessment to understand the breakdown of emissions, actions could include a switch to renewable energy, divestment from fossil fuels and creating sustainable supply chains and sourcing.


Now you know the score
Act Now for a better tomorrow!

To see this in practice, take a look at our case studies

Here is some more information on how to become carbon neutral and getting started with carbon credits

Thank you for your interest!

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