Carbon compensation

Carbon compensation means offsetting emissions by reducing them elsewhere. Climate change mitigation projects, such as reforestation projects, generate a specific amount of CO₂ certificates based on the estimated amount of emissions reduced or saved as a result of this project. Other parties, such as governments or companies, can buy these CO₂ certificates to offset their emissions on the balance sheet. On an individual level, compensation can be made by agreeing to pay a certain amount in addition to a purchase, which is then used to finance such mitigation projects.

CO₂ compensation, also known as climate compensation, refers to strategies for offsetting greenhouse gas emissions caused by human activities, particularly carbon dioxide (CO₂). The essential concept behind it is that unavoidable emissions at one location can be balanced out by investing in climate protection projects elsewhere that generate equivalent climate effects. This begins with the calculation of the CO₂ footprint of a product, activity, or company. Emissions that cannot be avoided or reduced can be neutralized by purchasing CO₂ credits. These credits finance globally certified climate protection projects. The global balance of emissions is crucial—regardless of where emissions are produced or reduced.

There are two main categories of compensation projects: natural and technological projects. Natural projects utilize biological processes for carbon sequestration, such as reforestation or the protection of existing forests. Technological projects include measures such as investments in renewable energies or innovative technologies for CO₂ capture from the air. Both approaches have specific advantages and disadvantages, such as differences in effectiveness and costs.CO₂ compensation markets are divided into a compliance market, which has legislative requirements for offsetting emissions, and a voluntary market that targets individuals and companies.

The quality of compensation measures is ensured through certifications that guarantee actual impact and prevent double counting. However, critics question the simplicity of the concept of “compensation,” as balancing emitted CO₂ amounts is more complex in reality. Overall, CO₂ compensation is an important tool in climate protection but should only be used in alignment with the principle of “avoid before reduce before compensate.”