Final answer:
A carbon offset is a reduction in carbon emissions by one entity to compensate for emissions made by another, according to Bumps and Liveryman. It's a system designed to help achieve net-zero emissions by allowing emitters to support environmental projects that reduce carbon dioxide elsewhere.
Step-by-step explanation:
According to Bumps and Liveryman, a carbon offset is b) A reduction in carbon emissions achieved by one entity to compensate for another's emissions. This concept arises from the principle that companies or individuals can invest in environmental projects around the world to balance out their own carbon footprints. The notion is tied to a larger strategy of achieving net-zero emissions, where the total amount of carbon dioxide emissions is balanced by an equivalent amount of carbon sequestration or offsetting.
Carbon taxes and carbon offsets are two methods that can work towards reducing overall emissions. A carbon tax directly charges those who emit carbon dioxide, thereby providing an economic incentive to reduce emissions. On the other hand, carbon offsets provide a mechanism for emitters to financially support projects that reduce emissions elsewhere, effectively balancing out their carbon footprint.