Now more than ever, efforts to combat climate change are becoming universal. Individuals, corporations, and governments are looking for ways to consume more sustainably, reduce their natural resource usage, and better steward the environment. With everyone looking for ways to aid in the fight for climate equilibrium, a key part of the solution lies with a purchase made by corporations. Whether it is through a lens of environment, social, and corporate governance (ESG) or simply a way to lead by example, more companies are looking for voluntary methods to curb or neutralize their carbon dioxide, methane, and other emissions. A favorable strategy to do so is by purchasing carbon offsets.

Purchasing carbon offsets allows corporations to neutralize their carbon contributions while supporting efforts to restore the climate. To comprehend the many routes companies take to purchase carbon offsets, let’s first explore what carbon offsets are and how the market works.   

Carbon offsets mean a reduction in greenhouse gas emissions in one area to compensate for emissions produced elsewhere. Currently, there are two substantial markets for carbon offsets: the first having to do with governmental agencies and the second being voluntary.

The first is a “cap-and-trade” system, where a government agency limits greenhouse gas emissions from specific industry participants or corporations. These companies abide by decreasing emissions from their operations through any number of strategies. One example may be retrofitting their complexes and facilities. If a corporation is so successful that it can lower its emissions beyond the limit, it is then able to sell credits to other companies who may struggle to reduce their emissions. This incentivizes innovation without policy prescribing emission reduction mechanisms. 

The second system is a voluntary market. This elective market allows any individual or corporation to neutralize their carbon footprint by financing projects to reduce emissions. Carbon offsets projects can take many different forms. Some projects include planting trees to capture emissions, creating clean, renewable energy in the form of solar panels or wind farms, and even encapsulating emissions such as methane at a landfill. This second method forges partnerships by emitters and conservationists, or high revenue organizations and expanding technological start ups.

While understanding the technicalities of carbon offsets are important, it’s easy to assume major corporations may not be taking part. However, the opposite is often truer. Google, for example, has been carbon neutral since 2007 and is projecting to be carbon free by 2030. By purchasing carbon offsets, Google has neutralized all of its carbon emissions since its founding. While Google has canceled out its emissions from their personal operations, they are also providing funding to businesses across the globe to transition to carbon-free operations.

Another carbon offsets tactic Google has employed is reforestation. Currently, they are focusing efforts in California, Texas, Australia, and Spain. They are also teaming up with Crowther Lab to advance a global database to increase efforts of restoration projects worldwide. Many start ups and niche organizations utilize innovative technologies to promote greater reforestation efficiency by utilizing traditional planting, overhead mapping, diverse nutrient-rich seed pods, and even drone planting mechanisms. 

Even the energy and transportation sectors have begun partaking in offset markets. A recently announced offset project comes from the Mountain Valley Pipeline, which will span over 300 miles from northwestern West Virginia to southern Virginia. The pipeline will be responsible for transporting natural gas. The emissions from the operations will be neutralized by over $150 million in carbon offsets. The carbon offsets will take form by that of a methane abatement program in a mine near southwestern Virginia. This will have a far-reaching impact, by preventing high-climate impact methane from reaching the atmosphere and also by boosting investments in carbon capture technology.

While it’s easy to assume the brunt of fighting the climate crisis will infringe on everyday life, it is important to remember that individual efforts have a tremendous impact. Encouraging businesses, individuals, and others to invest into carbon offsets is also key. It takes everyone coming together to combat an issue as universal as the climate. As this fight continues, the partnerships between carbon offset purchasers and the technological and conservation-oriented projects benefiting from investment will be critical.


Written by Rachel Spencer, Communications Intern


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.