Carbon Offset Cost Calculator

Compare the cost of offsetting emissions against reducing them at source.

About Carbon Offset Cost Calculator

Comparing abatement cost per tonne with the offset price ranks options on a common basis. Measures cheaper than offsets should always be done first, since they are permanent. Offset prices are expected to rise as cheap projects are exhausted, which improves the case for reduction measures with long lives.

Formula

Carbon Offset Cost

Abatement cost = capital cost ÷ lifetime tonnes avoided; compare with the offset price

abatement cost: Cost per tonne of emissions permanently avoided
marginal abatement: The basis for ranking decarbonisation measures

Worked example

With the default values below, Carbon Offset Cost Calculator returns Cost per Tonne Avoided at Source of $88.89. Change any input above and every figure here is recalculated in your browser.

Inputs used

Emissions to addressminimum 0 t CO2e: 100 t CO2e
Offset price per tonneminimum 0: 25
Capital cost of a reduction measureminimum 0: 40,000
Emissions avoided by that measureminimum 0.01 t CO2e: 30 t CO2e
Life of the reduction measureaccepts 1–40 years: 15 years

Results

Cost per Tonne Avoided at Source: $88.89
Cost of Offsetting Everything: $2,500.00
Cost of Reducing Then Offsetting the Rest: $4,416.67
Lifetime Emissions Avoided: 450.0 t CO2e
Recommendation: Offsetting is currently cheaper per tonne, though reduction is permanent

Step by step

1Values used
2Carbon Offset Cost
3Cost per Tonne Avoided at Source= 88.89
4Cost of Offsetting Everything= 2,500.00
5Cost of Reducing Then Offsetting the Rest= 4,416.67
6Lifetime Emissions Avoided= 450.0 t CO2e
7Recommendation= Offsetting is currently cheaper per tonne, though reduction is permanent

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Carbon Offset Cost calculated?

Abatement cost = capital cost ÷ lifetime tonnes avoided; compare with the offset price Comparing abatement cost per tonne with the offset price ranks options on a common basis. Measures cheaper than offsets should always be done first, since they are permanent.

Why does Carbon Offset Cost matter?

Offset prices are expected to rise as cheap projects are exhausted, which improves the case for reduction measures with long lives.

What values do I need to enter?

This calculator takes 5 inputs: Emissions to address, Offset price per tonne, Capital cost of a reduction measure, Emissions avoided by that measure, Life of the reduction measure. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.