Carbon Offset

Weird weather patterns and melting polar icecaps have raised awareness of climate change. How big is your "carbon footprint"? Can you reduce it? Can you offset carbon to help live a "greener" lifestyle? Offsetting your carbon emissions is one method of easing your environmental conscience.

• What is carbon offsetting?
• Why should I consider offsetting carbon emissions?
• Where does most carbon dioxide come from?
• How can I switch to a green energy provider?
• What is a carbon offsetting scheme?
• What types of offsetting schemes exist?

What is carbon offsetting?

This is a way of atoning for any carbon sins. You can counter the damage done through the release of carbon dioxide emissions (CO2) from flying or heating your home, for example.

Carbon offset schemes set a price on the amount it costs to mitigate the harm from emissions.

Offsetting may have been around for over a decade, but it has only taken off in the past few years as consumers are increasingly aware of climate change. There are numerous providers now allowing people and companies to offset - often simply by joining schemes online.

But remember, there are other ways to cut emissions, such as opting for a green energy supplier to reduce the damage done by central heating.

Paying too much for your gas or electricity? Find out how much you could save with a new supplier.

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Why should I consider offsetting carbon emissions?

Each time we heat our homes, take a flight or drive our cars, CO2 is added into the atmosphere. CO2 is a greenhouse gas that is released when fossil fuels such as oil, gas and coal are burnt. A build up of CO2 in the atmosphere can cause the earth to 'heat up', so affecting the climate we live in.

We can all help reduce the amount of CO2 produced by taking simple steps such as walking or cycling to work, taking the train instead of flying, or switching gas and electricity suppliers so we are using renewable or green energy.

We are also able to offset the remaining CO2 that can't help but be produced by buying carbon credits or certificates from companies who can offset on our behalf.

See how you could offset your carbon emissions today

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Where does most carbon dioxide come from?

About two-thirds of the electricity in your home is generated by burning coal and gas in power stations, which in turn pump out around six tonnes of carbon dioxide (CO2) per home per year. CO2 is the main gas responsible for climate change.

The UK contributes about 2% to global man-made emissions, which are estimated to range between 22.8 and 25.3 billion tonnes carbon dioxide equivalent per year. Carbon dioxide accounted for about 84% of the UK's man-made greenhouse gas emissions in 2005, according to the Department for Environment, Food and Rural Affairs (Defra).

Defra estimates that in 2005, 37% of carbon dioxide emissions were from energy industries, 22% from road transport, 18% from other industries and 15% from residential fossil fuel use. Since 1990, emissions from the energy industry have reduced by 12% and other industrial emissions reduced by 14%.

Research carried out by the National Consumer Council shows that 64% of homeowners in the UK said they would be willing to consider switching to a greener tariff for their energy supply. However, there are currently only around 1% of households signed up to green tariffs.

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How can I switch to a green energy provider?

Switching from non-renewable fuels only takes a few minutes online and unlike solar or wind power, does not require any adjustments to your home such as new pipes or boilers.

Whilst the energy entering your home will remain the same, you may be comforted by the knowledge that you are doing something to help preserve the future of the planet.

By law, energy suppliers must now make sure that at least 6% of all the energy they provide comes from renewable sources and this target will increase every year. But by choosing a specialist company, such as Ecotricity, Green Energy or Good Energy, the impact will be greater.

Look for a greener energy provider for your home now.

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What is a carbon offsetting scheme?

Carbon offsetting schemes aim to make amends for the greenhouse gases you produce by investing your money in schemes that benefit the environment.

Carbon offsetting may be achieved by buying emission reduction credits generated by projects that have reduced carbon dioxide emissions anywhere in the world. Companies do this by investing in projects and other initiatives, or buying credits from businesses who are only allowed to produce a certain amount of CO2 each year, under EU law.

However there is no evidence that these schemes do actually offset or reduce emissions and there is an argument that they tend to encourage a 'business as usual' approach to pollution. They have even received some criticisms that there is no regulatory body to oversee whether offsetting schemes have even been set up or that they are effective.

The projects tend to be in the developing world because that makes them cheaper - but it does also make it more difficult to monitor them. The price of a ton of carbon saved tends to range from £2 to £20.

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What types of offsetting schemes exist?

Forestry schemes, including tree planting, were some of the earliest projects. More recently, energy efficiency projects in developing countries have sprung up. But most offsetting is achieved by planting trees.

These projects provide anything from energy efficient light bulbs or cookers to wind farms.

The prices vary depending on the amount of CO2 in question. Offsetting flights has been especially popular, in part because of the relative ease of knowing how much CO2 has been released.

Of course, the only way to maintain true carbon neutrality is not to take that flight in the first place. However, at least you can do your bit by choosing a green utility provider and doing the recycling.

Simple measures like switching to a green energy provider and reducing your energy consumption by making your home more energy efficient may be steps in the right direction.

Find out more about carbon offset.

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21 November 2007 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.