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A carbon offset is a reduction or removal of greenhouse gas emissions made to compensate for emissions occurring elsewhere. Offsets are typically measured in metric tonnes of CO2 equivalent and can be generated through projects such as reforestation, renewable energy, or methane capture. They are purchased as credits on voluntary or compliance carbon markets.
Carbon offsets remain controversial in ESG circles, as critics argue they can delay genuine emission reductions. High-quality offsets with verified additionality and permanence are increasingly distinguished from low-quality alternatives.
A carbon credit is a tradeable certificate representing the right to emit one metric tonne of carbon dioxide or its equivalent in other greenhouse gases. Credits are generated through verified emission reduction or removal projects and can be traded on voluntary or compliance carbon markets. They serve as a market-based mechanism for incentivising emissions reduction.
Net zero is a state in which the greenhouse gases an organisation adds to the atmosphere are balanced by an equal amount removed from it. Reaching net zero means cutting emissions as deeply as possible, then removing any residual emissions through carbon removal projects. The aim is to limit global warming to 1.5°C above pre-industrial levels.
Carbon neutrality is a state in which the net carbon dioxide emissions linked to an entity or activity equal zero. It is reached by measuring emissions, reducing them as far as possible, and compensating for the remainder through carbon offsets. Carbon neutrality differs from net zero, which usually requires deeper absolute emission reductions.
Nature-based solutions are actions that protect, sustainably manage, or restore natural ecosystems to address societal challenges such as climate change, biodiversity loss, and disaster risk. Examples include reforestation, wetland restoration, and sustainable agriculture. They provide co-benefits for both people and biodiversity.