Carbon Management Strategies: Insetting Part 2

The Differences Between Insetting & Offsetting 

Continuing with the previous blog concerning Insetting and Offsetting, we have attempted to give a summary of the key differences between the two options which are highlighted as follows [1]: 

Development

Offsetting 

Emissions reduction projects developed by “project developers”.

Insetting 

Emissions reduction potential is identified by businesses exploring their supply chain, staff, and customer GHG footprints.

Verification and Certification

Offsetting 

Projects are verified and certified through programmes such as the Clean Development Mechanism, Voluntary Carbon Standard, or Gold Standard to name a few. 

Insetting 

Agreement between stakeholders on how emission reductions will be achieved through collaboration action. How the resulting benefits will be shared and communicated. The total emissions reductions may be uncertain at the point of agreement of inputs.

Transaction

Offsetting 

Emissions reductions credits are traded between two entities. Quantities and prices are specified in the contract and normal trading conditions are applied on issues such as timing of delivery.

Insetting 

Agreement between stakeholders on how emission reductions will be achieved through collaborative action and how the resulting benefits will be shared and communicated. Total amount of emission reductions may be uncertain at point of agreement of inputs.

Monitoring/ Follow-up

Offsetting 

Monitoring and follow-up is normally specified in contract. 

Insetting 

Emissions reductions occur within the boundaries of one or several of the participants and will be captured within the scopes of corporate or individual GHG accounting. 

Relationships

Offsetting 

Purchaser and offset provider are normally discrete/ non-related entities (essentially a trading relationship).

Insetting 

Project is a collaborative activity between stakeholders in one or more businesses.

Written by Jimmy Olet

[1] Econometrica.com