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What is the most cost-effective way to buy carbon offsets?

Offset sellers make it easy to compare prices across projects—but you should also make sure you can trust that your purchase is really keeping carbon out of the air.


December 14, 2021

First, a little background. When you buy a carbon offset, you're buying a commitment from a company or organization that it will remove a certain amount of greenhouse gases from the atmosphere. Offsets are designed to compensate for a buyer’s emissions. For example, one common way people purchase offsets is along with a flight. While commercial zero-carbon flights do not exist (yet), some airlines offer offsets as a way for you, as the flyer, to “cancel out” the amount of carbon your flight will produce.

These projects can be very different from one another. Your offset purchase might actually remove CO2 from the atmosphere, such as by supporting a project that is planting or protecting trees, or it might prevent greenhouse gases from entering the atmosphere in the first place, like by building solar or wind farms (which can replace power plants that burn fossil fuels).

With so many different approaches to fighting climate change, it’s not surprising that not all carbon offsets cost the same. Luckily, they are easy to compare as cost measurements are pretty standard: what is the price of keeping one ton of CO2 out of the atmosphere? If you’re funding “direct air capture” machines that pull CO2 out of the air to bury underground, the price per ton of CO2 can be as high as $1,200. Most offset purchases, however, will run you in the neighborhood of $10 to $30 a ton, and some can be even cheaper.

So how do you choose? Well, there’s another important factor you need to consider first.

The verification process and additionality

“The bigger concern that people have is whether or not the money they are spending actually leads to reducing carbon,” says Dr. Jeremy Gregory, Executive Director of the MIT Climate and Sustainability Consortium and a Faculty Fellow for the MIT Office of Sustainability where he works to reduce MIT’s greenhouse gas emissions.

Organizations and companies that sell carbon offsets are usually verified by a reputable independent source. These verifiers determine whether the projects that your offset purchase supports are really keeping as much carbon out of the atmosphere as they claim.

Established verifiers like Gold Standard, Verified Carbon Standard and Climate Action Reserve have evaluated thousands of projects and come up with rules and requirements for everything from tree planting to building wind farms. A look at their evaluations can help you understand how carbon offsets are measured and what safeguards are in place to ensure they’re working as intended.

“The tricky part is it comes down to this concept of what they call additionality,” says Gregory. “And what that means is basically, had you not taken this action, would there still be carbon emissions?” In other words, you want to know that you’re paying for a reduction in greenhouse gas emissions that would not have happened without your offset purchase—in short, that your offset is additional to already existing reduction efforts.

Why is this important? Well, let’s look at California’s landfills. These landfills are required by law to have equipment that captures and destroys methane, a potent greenhouse gas. Landfill owners might like to fund this equipment by selling offsets—and some do—but in California, the project would not be additional to emissions reductions that are already required, and a good verifier would not let it slip by.
The most cost-effective carbon offset is not necessarily the best one for you. There may be  other things you want to consider when choosing which project to get a carbon offset from. For example, if you like the idea of supporting companies who are helping low-income families or creating access to more reliable electricity, you may choose to purchase offsets from those kinds of projects, even if they aren't the cheapest option. But if your goal is to keep carbon out of the air as cheaply as possible, find an offset seller you trust, make sure they are working with a high-quality verifier, and then buy credits for the lowest-cost projects they offer. 


Thank you to Philip Koshy of Staten Island, New York, for the question. You can submit your own question to Ask MIT Climate here.


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