Carbon offsets are a method whereby funds are redirected to projects that help reduce global emissions. Businesses or individuals often purchase carbon offsets instead of decreasing their carbon footprints in instances where emissions appear inevitable, or they do both to make their emission reduction efforts go further.
Carbon offset projects can include effective cookers for rural communities, bio-gas production from organic matter, and a variety of initiatives aimed at reducing deforestation and regenerating forests that have been damaged.
The procedure of certifying a project as eligible for carbon offsets isn’t simple. Carbonbay is in the business of shepherding companies through the Byzantine regulatory maze that have been put into place under The United Nations’ Clean Development Mechanism (CDM) to make sure that not only are the emission reductions legitimate, but that there is any existing financing available for a project that is similar to this. That typically means the projects are not in line with routine and have no chance to be successful without credits. Emissions reduction credits permit companies to earn compensation for every metric ton of carbon emissions avoided. These can be certified through CDM or other respected standards that include The Gold Standard, and the Verified Carbon Standard (VCS).
“Carbon offset … can help environmental projects who aren’t able to obtain funding on their own.”
Pros and Cons of Carbon Offsetting. Pros of Carbon Offsetting
Carbon offset offers benefits on both sides of the process. It assists environmental projects that aren’t able to get funding on their own and also gives businesses the chance to decrease their carbon footprint.
A lot of companies aren’t able to reduce their carbon footprint as they’d like to. In certain cases, this is because their footprint is already very small (e.g. software company), but they want to expand their reach. Other industries, for instance, heavy equipment for example, or shipping on oceans, do not have low-carbon alternatives for their customers in the moment. Through aiding in the financing of environmental projects that lower emissions, companies can make some up for the carbon they cannot eliminate themselves.
Although many offset purchases are voluntary in some cases, there are some places in which they are necessary to comply with local laws and standards, and stay clear of penalties. This is yet another advantage of this system of carbon offset: It offers regulators a way to enforce environmental regulations.
Some companies also use offsets to demonstrate that all or a portion of their operations are “carbon non-carbon” or “carbon positive.” Additionally, offsets provide the structure needed for these companies to keep track of their own carbon footprint. A lot of consumers today prefer doing business with these companies.
Carbon offset provides valuable resources for projects that typically capture carbon through forest growth , or other mechanisms or avoid emissions, like renewable energy generation or energy appliances. Through focusing on projects that are less likely to be able to draw different types of financing, like a unique project in a particular region, they provide a valuable alternative to the more traditional financing mechanisms.
When a successful undertaking has been achieved through offsetting, and proven its viability, it is generally more straightforward for follow-on projects to be able to draw funding from other sources.
Reputable studies have found offsetting to be a viable method to lower greenhouse gases.
Carbon Offsetting: The Cons of Carbon Offsetting
Several criticisms have been aimed at carbon offsets, too. They are often philosophical in nature in their criticism of the idea that wealthy companies can buy their way out, instead of taking a more responsibility for their emissions. Others say that they undermine the demand for more ad-hoc collective actionlike carbon taxes. Are offsets letting polluters out of the loop too easily?
Others point to more pragmatic issues:
Certain forests that were protected through offsets have later been found to have burned or cleared of wood. It is possible that this could be intentional by those who were receiving the credits.
Are the credits really necessary, are they really necessary, or would the task have been completed without credit?
Are carbon measurement accuracy reliable, and can the companies that are monitoring these measurements be relied upon to do the right accounting?
How do you deal with fraud?
Is global warming happening too fast for carbon offsets to prove useful?
There are a few valid concerns in this. While there is no perfect system however, many of these issues have been acknowledged and addressed when both carbon standards and methods evolve.
Carbon offsets are not intended to be used as a substitute for directly taking action. They are rather as a supplement–or in some cases, as the only possible option. The industry of airlines employs many offsets, because there’s no alternative for commercial aircraft to fly without the use of fossil fuels. Under an international scheme called CORSIA which will allow them to limit emissions in 2019/2020 and have pledged to offset any increase in emissions starting from 2021.
In the case of forests that disappear following the qualification for offsets, this was addressed in the most recent VCS standard, which permits payments to be made in the case of forest carbon sequestration which has already occurred during the last decade. To limit further risks, a certain percentage of credits earned are set aside in “pooled buffers” to protect against unexpected damages, similar to an insurance policy.
The measurement process is also changing. Renewable energy projects are the easiest to gauge, as it is only necessary to check the meters. The land-use and forest projects might be more difficult however, models are getting better and technology like GPS, satellite imagery, and drones have proven useful in forming a more detailed view of how much carbon is remaining stored.
How to Track and Offset Your carbon footprint
Using a carbon credit exchange is common across companies. Banks are working with tech companies to get consumers involved. For instance, Swedish fintech startup Doconomy, has partnered together with Finnish Aland Bank to help regular customers understand the carbon footprint on the majority of purchases.
The Aland Index calculates the carbon footprint of any item being purchased by consumers by analyzing more than 200 variables. Paula DiPerna, who was responsible for establishing the first global cap and trade system in 2003, describes the index “a game-changer” that converts intangible value into an amount in dollars. Consumers then can use the dollar value to offset the carbon emissions produced by the item, making purchases carbon neutral.
“The index was designed … in order to provide the world with a voice in every pocket and at every point of sale.”
Helena Mueller, the head of Aland Index Solutions and co-founder of Doconomy
According to Helena Mueller, head of Aland Index Solutions and co-founder of Doconomy, “the index was established to create a global language that addresses climate change in all personal finance management, setting a dependable global standard as well as to give the planet a voice in every wallet and at every point-of-sale.”
Customers have access to the index via the DO application. It’s currently only available in Sweden however, Bank of the West teamed up along with Doconomy to bring it to the US within its 1 percent discount for accounts. Planet account. Through the mobile banking application it is possible to use there is an Aland Index is applied to transactions in order to calculate the carbon footprint of purchases that are made using the 1% credit card for the Planet debit card.
“The carbon footprint is presented in kilo or pounds generated as well as its social impact, i.e. the “true cost” of a product or a service when the negative effect of climate change are taken into account to be accounted for” states Mueller. “The bank, in this case, Bank of the West, has the option to help their customers view the carbon footprint of transactions, by the day, week months, and the year.”
Armed with this information individuals can take control for their environmental footprint. After all, there is nothing you can do about what you cannot measure.
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- October 5, 2024 7:10 pm