Carbon offsets come from projects that reduce greenhouse gases beyond business-as-usual. They are measured by comparing the actual emissions of a project to a conservative ‘baseline’ estimate of what emissions would have been had the project not been built. Different types of offset projects create offsets in different ways.
Renewable energy projects like wind turbines reduce emissions when the electricity they generate displaces dirty electricity from fossil fuel power plants. Offsets from a renewable energy project are quantified by estimating the amount of fossil fuels that would have been burned to generate the electricity that the project generates.
Cow power reduces emissions in two ways—by destroying methane and by generating heat or electricity that would otherwise have been generated by burning fossil fuels. Offsets from generating electricity are quantified the same way as offsets from a renewable energy project. Offsets from generating heat are quantified by estimating how much fossil fuel would have been burned to generate that heat. Offsets from destroying methane can be quantified either by measuring the actual amount of methane destroyed or by measuring the heat or electricity generated by burning the methane and estimating the amount of methane burned.
Biogas projects reduce emissions by destroying methane. They can also reduce emissions by generating heat or electricity or displacing natural gas used in industrial processes. Offsets from generating electricity are quantified the same way as offsets from a renewable energy project. Offsets from generating heat are quantified by estimating how much fossil fuel would have been burned to generate that heat. Offsets from destroying methane or displacing fossil methane used in industrial processes are quantified by measuring the actual amount of methane used or destroyed.
Forest projects reduce emissions by growing trees where there were none before or changing from traditional logging practices to conservation-oriented forest management. These increase the quantity of above- and below-ground biomass, pulling carbon from the atmosphere and locking it in forest carbon reserves.