A carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. A carbon credit or offset credit is a transferrable instrument certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. Both offsets and credits are measured in tonnes of carbon dioxide-equivalent (CO₂e). One ton of carbon offset or credit represents the reduction or removal of one ton of carbon dioxide or its equivalent in other greenhouse gases.

Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). In these programs greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners around the world. One aspect of climate change policy is unequal prices of carbon in the economy. This can cause economic problems if production flows to regions or industries that have a lower price of carbon. Economic instruments are needed allow carbon to be purchased in a way that helps equalize the price across regions. Offsets and credits make this possible.

Within the voluntary market, demand for carbon offset credits is generated by individuals, companies, organizations, and sub-national governments who purchase carbon offsets to mitigate their greenhouse gas emissions to meet carbon neutral, net-zero or other established emission reduction goals. The voluntary carbon market is facilitated by certification programs which provide standards, guidance, and establish requirements for project developers to follow in order to generate carbon offset credits.

Offsets and credits typically support projects that reduce the emission of greenhouse gases in the short- or long-term. A common project type is renewable energy, such as wind farms, biomass energy, biogas digesters, or hydroelectric dams. Others include energy efficiency projects like efficient cookstoves, the destruction of industrial pollutants or agricultural byproducts, destruction of landfill methane, and forestry projects. Carbon removal offsets include methods based on net-negative products and processes, such as biochar, carbonated building elements and geologically stored carbon.

Offsets and credits may be cheaper or more convenient alternatives to reducing individual or organizational fossil fuel consumption. However, some critics object to carbon offsets, and question the benefits of certain types of offsets. Due diligence is recommended to help businesses in the assessment and identification of "good quality" offsets to ensure offsetting provides the desired additional environmental benefits, and to avoid reputational risk associated with poor quality offsets. In 2023, the Guardian wrote, "The forest carbon offsets approved by the world’s leading provider and used by Disney, Shell, Gucci and other big corporations are largely worthless and could make global heating worse, according to a new investigation."