Carbon Offsets - Canada FAQ

What initiatives are happening in Canada to support greenhouse gas (GHG) emissions reductions?

The Canadian government has committed to achieving an economy-wide reduction in GHG emissions of 20% over 2006 numbers by 2020.  Carbon credits play a critical role in achieving this goal. Through carbon credits, Canada will offset a portion of the emissions that cannot be reduced through energy efficiency investments.

What is a carbon offset?

A carbon credit is also referred to as a carbon offset.  This commodity ensures that a metric ton of carbon dioxide (CO2), or its equivalent in other GHGs, is removed from the atmosphere or prevented from entering it.  Using carbon offsets, Canada can use a market-based commodity to most economically address its carbon reduction goals.

What does “equivalent” mean?

A carbon dioxide equivalent provides the common denominator for communicating  GHG emissions from the six GHG gases identified by the  Kyoto protocol (carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons) .  These gasses either trap more heat or last longer (or both) in the atmosphere than CO2. Offsetting these other gases is “worth” more than offsetting carbon dioxide, and this additional value is measured in tons of carbon dioxide equivalent (tCO2e). For example: the Kyoto Protocol lists a ton of methane as equivalent to 25 tons of carbon dioxide when released into the atmosphere.

What is a verified emissions reduction (VER)?

A VER is the unit of currency in voluntary carbon purchasing: one VER represents one metric ton of carbon dioxide emissions avoided or removed from the atmosphere. A voluntary project’s carbon offsets are called VERS. VERs are often compared to Certified Emissions Reductions (CERs) used in compliance markets.  By supporting VERs, Canada can create a robust voluntary market for these commodities.

What are examples of offset projects?

There are two categories of offset projects: emissions reduction projects and carbon sequestration projects.  Emissions reduction projects prevent carbon emissions by making emitting systems more efficient or by destroying the emissions themselves (i.e. burning the methane byproduct of agricultural or municipal waste).  Carbon sequestration projects remove carbon emissions that are already in the atmosphere.  This can be accomplished through forestry practices, as plants absorb carbon from the atmosphere, or by capturing carbon from emitting sources and storing it in the ground.

What is the best way to use carbon offsets given an organization’s GHG emissions?

Carbon offsets can be used to address Scope 1 and 3 emissions.  By using carbon offsets (or credits), Canada organizations can address direct emissions and those indirect emissions not associated with the consumption of purchased electricity, while fueling the demand for increased voluntary mitigation efforts.

What’s the difference between a compliance offset and a voluntary offset?

Compliance offsets are designed for use in a regulatory scheme, like those designed to comply with the Kyoto Protocol. In order to qualify in a regulated market, carbon project developers must spend a great deal of time and money on administration and paperwork. The voluntary carbon market supports projects from the Canada and other industrial countries that have not ratified the Kyoto Protocol as well as smaller-scale projects in developing countries that cannot afford the bureaucracy and expense of the compliance market.  Canada withdrew from the Kyoto Protocol on December 12, 2011.