Carbon credits have proven to be a new way that will help in reducing carbon emissions in the world. It aims at reducing the total damage that is done to the environment by greenhouse gases. It is a relatively new phenomenon, and there are a lot of questions that are lingering and have been left unanswered. People have doubts about the process as they cannot understand what the whole thing entails. How much carbon offsetting one needs to offset their carbon footprint and be neutral is also unsure, and the general public still doesn’t understand the principles.
What Are Carbon Credits
It is the easiest way to reduce your carbon footprint from your daily lifestyle. The idea revolves around the basis of if you cannot make changes in your lifestyle to ensure carbon emission compliance, then you can pay someone who is reducing the emission by their efforts. Examples of people working to reduce carbon emission are renewable and clean energy projects, reforestation and energy conservation. These activities will surely offset some amount of carbon emissions from your total carbon expenditure. The concept of carbon credits works in this way: if you are looking to go on a road trip with your car and you know you will create some carbon emissions, you can buy carbon credits from an organization that is critical to reducing their emissions and are going green. This way, your carbon footprint is neutralized.
Carbon Credit Pricing
Many claims to know how carbon credit priced, but end up getting duped. It is due to shoddy pricing mechanisms. Projects are coming up that are intuitive and transparent; some of the projects have standardized by agencies such as VCS and Gold Standard. An example of a project is a biogas project; this project guaranteed to reduce carbon emission by one metric ton of carbon dioxide emission. It can be exchanged for 11 US dollars. Biogas produces clean energy, the number of emissions from another unclean energy source is calculated, and then the offsetting options in carbon is then used in an economic context. Learn more about calculator for carbon offset.
Where To Buy Carbon Credits
Lack of proper regulation, the process of acquiring carbon credits is ambiguous and very opaque. Pricing has also been affected since there is no proper standard to which people can use in pricing. Companies have started working on the process to make it intuitive, affordable and approachable. Companies like CO2nsensus have prided themselves to be among the best sellers of carbon credits. They offer customized solutions that you can use to monitor your emissions and customize your emissions plan. Their projects are rated by IHS Markit, VCS and the Gold Standard.
Many companies are going head-on into the idea of carbon credits, one such company being JetBlue, and they bought enough carbon credits in 2016 to offset 800,000 metric tons of CO2. Airline carriers are also following suit and have started compensating using carbon credits.
Carbon credits are a brilliant way of reducing carbon emissions, and it brings awareness of your carbon expenditure and how to minimise it or neutralize it.
In general, carbon credit (also known as carbon offset) is a credit for the removal or reduction of greenhouse emissions from the atmosphere through an emission reduction project. The projects can be used by private individuals, industry or governments to compensate for the emissions they are producing.
In other words, carbon credits can be explained in three forms:
License to trade. A certificate is issued, allowing the prospective emitter to generate up to 1,000 kg of carbon dioxide or its equivalent.
Permission. Another explanation is usually granted to an organization, company, or country to produce a specific number of emissions that can be traded in, when not used.
Another common term. It refers to a carbon credit as a financial tool to minimize carbon emissions by preserving carbons for later or future use.
How Do Carbon Credits Work?
Typically, carbon credits are measured in tons of carbon dioxide-equivalents and are often bought and sold via trading platforms, online retailers, and international brokers. Those businesses that find it difficult to adhere to carbon emissions often buy carbon credits to compensate their emissions by making funding readily available to certain reforestation projects, forest protection, and renewable energy projects throughout the planet. These energy-efficient and renewable energy projects replace industrial processes and fossil fuel. As a result, it assists businesses in alleviating their emissions, as well as adhering to the global standards.
By offsetting a single ton of carbon, it implies that there will exist one less ton of CO2 in the atmosphere compared to what would otherwise have been. When solar energy firms sell carbon credits, for example, it assists them since these projects tend to be viable. The offsets’ buyers benefit since they can utilize these credits to alleviate their greenhouse gas emissions because most types of activities can reduce carbon offsets.
Some of the projects that sell carbon credits include biomass, geothermal, solar, and wind projects which replace low-cost home device projects that can do away with the need for additional energy, fossil fuel-powered plants, various afforestation projects, methane capture from agriculture and landfill gas, mitigation of heat-trapping greenhouse gases, protecting forests from illegal logging, and many more.
Learn more about carbon credits. Watch the video.
Various Mitigating Mechanisms
Although similar to the principle of using carbon credits, carbon offsets are primarily designed to assist in reversing the damage already caused. Here are a few of the features, as well as functions of applying carbon offsets.
Damage control. As mentioned above, one explanation given to carbon offsets is that they are a kind of damage control in which accountable parties can make reparations for past excessive emissions and basically via the buying of carbon offsets, pretend not to notice as harmful gases are regulated or mitigated elsewhere.
Investments. If you can, you can invest in projects which are uniquely designed to minimize or prevent greenhouse gases or carbon dioxide.
The vintage year. It’s a strange analogy similar to the harvesting of grapes, which indicates the year in which the minimization of carbon emissions happens
The source projects. The technologies that are made to offset carbons utilize methane and biomass.
Certification. It puts into place checks and balances to make sure that carbon offsetting methodologies and procedures are correctly authenticated and registered.