In the much smaller, voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources. For example, an individual might purchase carbon offsets to compensate for the greenhouse gas emissions caused by personal air travel.
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Offsets typically support projects that reduce the emission of greenhouse gases in the short- or long-term. A common project type is
renewable energy,
[6] such as wind farms, biomass energy, or hydroelectric dams. Others include
energy efficiency projects, the destruction of industrial pollutants or agricultural byproducts, destruction of landfill methane, and forestry projects.
[7] Some of the most popular carbon offset projects from a corporate perspective are energy efficiency and wind turbine projects.
[8]
The
Kyoto Protocol has sanctioned offsets as a way for governments and private companies to earn
carbon credits that can be traded on a marketplace. The protocol established the
Clean Development Mechanism (CDM), which validates and measures projects to ensure they produce authentic benefits and are genuinely "additional" activities that would not otherwise have been undertaken.