Carbon offsets can be created by a number of different offset project types, all of which do one of the following: avoid, reduce, remove, or destroy greenhouse gas emissions. The different types of projects are always evolving, based on demand and availability. You can think of offsets in two different categories:

Avoidance/Reduction 

Avoidance Examples

• Avoided Nature Loss: Limits the loss of nature such as forests & peatlands which house large amounts of carbon.

Reduction Examples

• ‘Additional’ emission avoidance/reduction: Reduces emissions from current sources without financial incentive/regulatory requirement.

Removal/Sequestration 

Removal Examples

• Removal is tech based projects that remove CO2 from the air: Machines that would suck carbon dioxide directly out of the atmosphere and bury it [Ocean Fertilization]

Sequestration Examples

• Sequestration primarily uses nature based projects: Forest Regrowth, Soil Restoration, Mangroves, Seagrass, and Peatlands

Energy efficiency projects, like installing more efficient lighting systems, use less energy and thus reduce greenhouse gas emissions. Projects like tree planting or soil-management techniques, on the other hand, remove carbon from the atmosphere and store it in living plants and soils.

Renewable Energy 

Renewable energy projects, such as wind or solar, avoid the greenhouse gas emissions associated with burning fossil fuels to generate electricity or heat, they can create high quality offsets. They avoid emissions from burning fossil fuels, which is the largest contributor to global warming.

Considerations

• Emission reductions from renewable energy projects are permanent
• Projects may result in other unintended environmental consequences if not designed carefully.
• Renewable energy projects can have issues with respect to additionality. For example, if projects are located in jurisdictions with legislated requirements or adequate incentives for renewable energy production, the projects likely would have happened anyway and would not be additional.
• Double Counting: the reductions from a wind farm could potentially be claimed by an electrical utility, the province the wind farm is located in, and the purchaser of the electricity —meaning the reductions would be counted and claimed more than once.
• Because of the potential for plant-based biomass to displace food production, it should ideally be made from waste by-products (e.g. corn stalks, husks, and cobs).

Energy efficiency projects

Energy efficiency projects, like installing more efficient lighting systems, use less energy and thus reduce greenhouse gas emissions. They are generally considered to be high quality because they reduce emissions from fossil fuel sources and create permanent reductions in greenhouse gas emissions. If they are successful they should reduce overall demand for energy.

Considerations

• The benefits can be double sided, for example switching to more fuel efficient wood burning stoves may reduce emissions and deforestation.
• They require careful verification.
• Projects that depend on human behaviour to reduce energy consumption (e.g transit instead of driving) are incredibly hard to verify additionality for.
• They can often lead to leakage or a rebound, i.e the energy saved may be used elsewhere.
• Offsets that improve the efficiency of unsustainable processes should be avoided.

Examples of projects

• Energy efficient technologies and investments

• Switching to low-energy stoves, appliances or lighting in municipal or community projects, and also larger projects such as industrial energy efficiency.

Fuel Switching

Fuel switching refers to the process of changing the type of fuel used to generate energy or power, typically from a fossil fuel to a more sustainable or low-carbon fuel. The goal of fuel switching is to reduce greenhouse gas emissions and mitigate the effects of climate change. The reductions from fuel-switching projects are usually relatively easy to quantify. They are also permanent.

Considerations

• Fuel-switching projects need to include a careful examination of the emissions associated with both fuels, particularly in the case of biofuels, where the greenhouse gas emissions associated with production are typically underestimated.
• It can create additional co-benefits
• It is important that the substitute fuel doesn’t have other environmental issues, e.g burning tires might produce energy, but it will pollute the air.

Examples of projects

• Switching to lower - carbon fuels: Fuel switching projects involve substituting a cleaner fuel that emits less carbon dioxide for another fuel (e.g., substituting natural gas for coal to generate electricity, or using biomass instead of natural gas to heat a greenhouse).

Methane Recovery

Methane “capture” is sometimes seen as a “low hanging fruit” in the offset industry, because it generates a higher number of offsets due to the greater global warming potential of methane.

Considerations

• Verification of these is straightforward because the reductions are easy to measure.
• Offsets from landfill methane should not be used to promote new landfills (duh).

Examples of projects

• Landfill Methane Recovery: Landfills generate methane as organic waste decomposes. Rather than getting released as emissions, that methane can be captured and used to produce electricity. These projects might flare the methane released from rotting organic waste in landfills, or capture it and use it to generate heat or electricity.

Biological Carbon Sequestration

Refers to storage of atmospheric carbon in vegetation, soils, woody products, and aquatic environments.

Afforestation

These projects involve planting trees in an area where the land-use has been non-forest for a specified period of time (usually more than 10 years).

Considerations

• Trees inherently lack permanence. Large amounts of carbon stored in trees can be suddenly released in forest fires, logging, or disease. This could cause them to fail the permanence test. 
• Trees take many years to reach maturity, during their early years trees are only absorbing a limited amount of carbon. Tree planting projects usually don’t start to deliver the goods until years, maybe even decades after they start
  

• Could create re-establishment of native biodiversity
• Reduce soul erosion
• Purification of water supplies
• In some cases forests where tree planting takes place would have naturally regenerated over time making the planting non additional.
• Some tree planting projects consist of planting a single species, and sometimes clones of a single tree resulting in minimal biodiversity.

Reforestation

Involves planting trees in a location where a forest has been cleared.

Considerations

See Afforestation List

Forest Protection (Avoided Deforestation)

Preserves forests in highly valued areas from conversion to other use such as agriculture, being flooded by hydro damns, or urban development.

Considerations

• The loss of forests is a significant contributor to greenhouse gas emissions in the tropics.
• Naturally forested areas are often reserves of biodiversity
• For them to be additional it should be demonstrated that the forested area in question would disappear in the short to medium term if the area was not protected.
• It is important to consider if protecting one area would result in deforestation/emissions elsewhere, failing the leakage test.
• They also suffer from a lot of the risks associated with afforestation & reforestation.

Forest Protection (Avoided degradation)

These projects preserve forests that would otherwise be degraded or damaged by activities such as logging, but that would be replanted or allowed to regenerate naturally (i.e. they would not be completely converted to other land uses such as agriculture, large hyrdo or urban development).

Considerations

• If a forest is logged or degraded in other ways part of the stored carbon is lost forever, even when the forest is replanted.
• Avoiding logging or other degradation of a forest can be a way to reduce greenhouse gas emissions.
• Accurate quantification of the reductions can be difficult.
• They are still vulnerable to permanence issues discussed previously.

Soil Management

Involves projects like tilling the ground less often in order to reduce the amount of carbon released back into the atmosphere through the disturbance.

• Storing carbon in soils through low tillage means the practices must continue indefinitely in order to maintain the stored carbon (meaning that if a farmer commits to this it has to be a decade long commitment).
• If low tillage is something that would have happened anyway it is not additional.