Carbon Offsetting

Example: Business A1 is unable to reduce 100 tonnes of its CO2 emissions in the short term. There is a project somewhere else in the world which could save 100 tonnes easily, but they need a cash injection. For example, a community in India could swap from carbon intensive kerosene as an energy source to solar panels – but they can’t afford the solar panels. Through the purchase of carbon offsets, you provide the financial assistance to subsidise the cost of getting solar panels onto housing, and through that means you have enabled a saving of 100 tonnes of CO2. Business A1 has therefore reduced global net CO2 emissions by 100 tonnes. The added benefit is that Business A1 has helped facilitate a step change in local technology in a developing market.

http://www.carbonneutral.com/knowledge-centre/offsetting-explained/