What is a “carbon offset”?

A “carbon offset” refers to a mechanism that allows an individual or company to compensate for their carbon dioxide emissions by funding projects that reduce or remove emissions elsewhere. The essence of carbon offsets is that while one party may produce emissions through activities such as travel, manufacturing, or energy production, they can invest in projects like reforestation, renewable energy, or energy efficiency initiatives that will effectively reduce an equivalent amount of greenhouse gases from the atmosphere.

By purchasing carbon offsets, these individuals or companies are taking responsibility for their carbon footprint. This practice promotes sustainability and is a key component of many environmental strategies aiming to mitigate climate change impacts. For instance, if a firm emits a ton of CO2 through its production processes, it might buy offsets that support projects which sequester or prevent an equivalent ton of CO2 from being emitted.

In contrast, the other options do not accurately describe a carbon offset. An increase in emissions would not contribute to a solution for climate change; generating carbon credits is a related concept that addresses emissions reduction as well but doesn't directly define what a carbon offset is; and an economic tax for carbon production refers to a financial mechanism used to encourage reduction in emissions, rather than the specific action of offsetting emissions directly through compensatory projects