What does "carbon offsetting" entail?

Carbon offsetting is a practice that involves compensating for greenhouse gas emissions by investing in initiatives aimed at reducing or removing an equivalent amount of carbon dioxide or other carbon emissions from the atmosphere. This is typically done by funding projects such as reforestation, renewable energy, or energy efficiency improvements. The central idea is that while an individual or organization may still produce carbon emissions, they can 'offset' their impact by supporting projects that have a positive effect on reducing overall emissions.

The option relating to reducing overall energy consumption in households focuses on one approach towards sustainability but does not encapsulate the broader concept of carbon offsetting, which emphasizes investment in external emission reduction initiatives. Tax incentives for businesses that reduce emissions may motivate organizations to emit less, but this does not directly relate to the action of offsetting emissions through project investment. Finally, purchasing more fossil fuels to boost efficiency runs counter to the goals of reducing carbon emissions and therefore does not reflect the intent of carbon offsetting. Thus, investing in reduction projects is the accurate representation of what carbon offsetting entails.