Here’s a defintion of Carbon offset from Wikipedia:
A carbon offset is a service that tries to reduce the net carbon emissions of individuals or organizations indirectly, through proxies who reduce their emissions and/or increase their absorption of greenhouse gases. A wide variety of offset actions are available; tree planting is the most common. Renewable energy and energy conservation offsets are also popular, including emissions trading credits.
The intended goal of carbon offsets is to combat global warming. The appeal of becoming “carbon neutral” has contributed to the growth of voluntary offsets, which often are a more cost-effective alternative to reducing one’s own fossil-fuel consumption. However, the actual amount of carbon reduction (if any) from an offset project is difficult to measure, largely unregulated, and vulnerable to misrepresentation.
Attach a comment if you know of other web hosts doing this or if you have doubts about the efficacy of carbon-offsetting.