Carbon offsets are being the used by organizations and individuals to cut down their greenhouse gas emission (in net) or to become carbon neutral. Carbon offsets are sold by different companies and they do come in various flavours.
ABN AMRO in Australia does a good job of explaining the various offsets.
Carbon Offsets are created by projects that reduce, avoid or remove greenhouse gas emissions from the atmosphere.
A landfill gas project that traps and uses the methane gas caused by decomposing waste reduces the emissions that would otherwise escape to the atmosphere
A windfarm project produces electricity instead of coal-fired power stations and avoids the emissions would otherwise have been caused by those coal-fired power stations
A forestry project removes emissions from the atmosphere as carbon dioxide is taken in by the trees as they grow
Carbon Offset units are created according to the rules of regulated schemes to which those projects belong or according to international standards for emission offsetting projects.
- RECs are “Renewable Energy Certificates” created under the Commonwealth Government’s Mandatory Renewable Energy Target (we only use RECs to offset electricity emissions)
- GACs are “Greenhouse Abatement Certificates” created under the New South Wales Government’s Greenhouse Gas Abatement Scheme
- GFCs are “Greenhouse Friendly Credits” created under the Commonwealth Government’s Greenhouse FriendlyTM program
- CERs are “Certified Emission Reductions” created under the Kyoto Protocol
- ERUs are “Emission Reduction Units” created under the Kyoto Protocol
- VERs are “Verified Emission Reductions” created under international standards such as the WWF, Gold Standard and the International Emissions Trading Association’s Voluntary Carbon Standard
Check the link for the explanation for each type of offsets.