Carbon offsets tend to be sold in two ways: either in bulk to a large company, such as the CFL, which last year bought 300 tonnes worth of offsets as part of its Grey Cup initiative, or to individuals, such as Aeroplan members who can now tack on a few extra Aeroplan miles to offset the emissions of their trip. In either scenario, the offsets are brokered by an intermediary that buys them from an environmentally beneficial enterprise.

But in order for such a transaction to be truly "carbon neutral," the seller would have to use the offset money to create an environmental benefit that would not otherwise have happened.

Robert Stavins, director of the Environmental Economics Program at Harvard University, says that is the key problem with offset programs -- the companies that generate credits must do so by "doing something that they otherwise would not have done.

"It is a comparison with an unobserved -- and unobservable -- hypothetical," he said.

Mark Jaccard, a professor in the school of Resource and Environmental Management at Simon Fraser University, illustrates the problem with offset investments in, for example, tree planting in Guatemala or a wind generator in India.

"Was the planted tree in Guatemala truly an additional investment in reducing greenhouse gases or would another tree have sprouted in that spot eventually? Does the planted tree represent a permanent increase in biosphere sequestration of carbon or will it be cut down in 10 years? Has the Indian wind generator actually helped prevent or delay the construction of a coal-fired power station, or was it simply a wealth transfer to one region in India while the expansion of coal stations has continued at the same pace? We cannot know, because future actions are unknowable."

A report in BusinessWeek magazine last year probed the question whether U.S. companies that sell offset credits have actually changed their practices because of the extra revenue. The answer was typically: "No, but they were happy to have the money."

The magazine spoke to the owners of a massive garbage dump in Arkansas that burns off methane produced by the decomposing refuse. The dump's methane-burning operation is quite extensive, and it has a clear environmental benefit because methane is a potent greenhouse gas, so the dump's owners have sold thousands of tonnes of gas-reduction offsets to TerraPass, a U.S. company that has become one of the leading offset brokers.