Carbon offsetting means balancing or compensating for carbon emissions in one place with a reduction in emissions in another. Since it doesn’t matter where Green House Gases (GHGs) are emitted, as their effect on climate change is the same, reducing GHG emissions in Brazil or Italy is as effective as doing so locally. And while we need to reduce our personal carbon emissions, some emissions are currently unavoidable, so carbon offsetting is the way to compensate for those emissions we cannot stop.

Coolplanet believes carbon offsetting isn't THE solution to global warming but it is PART of the solution. It helps educate people, fund carbon reduction projects and technologies, as well as helping us move towards a carbon free lifestyle. To become carbon neutral all you have to do is reduce and then calculate your own emissions and then offset them with the project of your choice, we take care of the rest.

Carbon reduction projects throughout the world create a tradable 'carbon credit' for every ton of carbon dioxide equivalent (C02-e) that is stopped from entering our atmosphere. This credit is bought on your behalf and then 'retired' so it can't be sold again, meaning that you have stopped one ton of C02-e that otherwise would have entered the atmosphere.

This ability to generate and trade carbon credits was an implementation of the Kyoto Protocol. It enabled countries that weren't going to meet their reduction targets to buy credits from countries that had surpassed theirs. Meaning that overall Kyoto targets were met and there was an economic incentive built into the equation to encourage companies and countries to emit less and create a demand for clean energy technologies.

Carbon offsets can be created in a number of different ways:

There are different types of carbon credits and different carbon markets throughout the world. Here is an explanation of common terms that will either simplify the matter or confuse you further, depending on your point of view.

Carbon Market - These are markets for trading carbon and they fall into two categories regulated and voluntary. The regulated market is for countries that have ratified Kyoto while the voluntary market is for everyone else i.e countries, companies and individuals who do not have legally binding reductions.

Carbon Credit - The reduction of GHG's equal to one ton of carbon dioxide.

REC (Renewable Energy Certificate) - A credit that comes from renewable energy equal to one MWh which equates to one hour of electricity. Renewable energy comes primarily from solar and wind power, hydroelectricity, biomass and biofuels.

VER (Verified Emission Reduction) - A credit that is not verified through Kyoto but usually through a third party

Carbon Trading - A system that allows countries to trade carbon credits to meet their Kyoto targets

CDM (Clean Development Mechanism) - A system that allows developed countries to buy carbon credits from carbon reduction projects in developing countries. These credits are called CER's (Certified Emission Reductions).

JI (joint implementation) - A system that allows developed countries to buy carbon credits from carbon reduction projects in other developed countries.

EU ETS (European Union Emission Trading Scheme) - The world's largest GHG trading system.

CCX (Chicago Climate Exchange) - North America's only voluntary and legally binding GHG trading system.

GGAS (NSW Greenhouse Gas Abatement scheme) -The world's first carbon market based in NSW. Credits traded are NGAC's (NSW Greenhouse Gas Abatement credit).