Carbon offsetting is a process that allows funds to be directed to projects that reduce global emissions. Companies or people often buy carbon offsets instead of decreasing their carbon footprints in situations where carbon emissions are unavoidable, or sometimes they do both to make their efforts to reduce emissions go further.
Carbon offset projects include efficient stoves for cooking in villages and bio-gas generation from organic matter, and a variety of initiatives aimed at reducing the deforestation rate or regenerating damaged forests.
The process of certifying a project to be eligible for carbon offsets isn’t simple. Carbonbay is in the business of shepherding initiatives through the Byzantine array of regulations that have been put in by the UN’s Clean Development Mechanism (CDM) to ensure that not just emissions reductions are legitimate, but that there is no existing funding for a project of this nature. It is generally a sign that the projects are not in line with the norm and are unlikely to succeed without the credits. Emissions reduction credits allow projects to get compensation for each metric ton of carbon emissions avoided. These credits can be verified with CDM or other standards that are respected which include The Gold Standard, and the Verified Carbon Standard (VCS).
“Carbon offsetting … can help environmental projects that can’t secure funds by themselves.”
What are the Pros of Carbon Offsetting
Carbon offset offers benefits both ways through the process. It assists environmental projects that cannot get funding on their own, and gives businesses a greater chance to decrease the carbon emissions of their operations.
There are many companies that can’t cut their carbon emissions to the extent they’d like to. In some instances, this is due to the fact that their footprint is already small (e.g. software company) But they’re looking to expand. Other industries, like heavy equipment for example, or shipping on oceans, don’t have low-carbon options available to serve their markets currently. By helping to fund initiatives that help reduce emissions, companies can make more up for the emissions they can’t eliminate themselves.
While many offset purchases are voluntary, there are some jurisdictions where offset purchases are required to conform to local laws and standards, and get rid of penalties. Another benefit of an offset program for carbon: It provides regulators with a means to enforce environmental regulations.
Some companies also use offsets to prove that the majority or all of their operations is “carbon neutral” or “carbon negative.” Additionally, offsets provide the structure needed for these companies to monitor their carbon footprint. Many consumers nowadays prefer to do transactions with companies with offsets.
Carbon offset provides valuable resources to projects that generally either trap carbon in the form of forests and other methods or reduce emissions, such as renewable energy generation or the use of clean energy appliances. Focusing on projects that are less likely to be able to draw other types of funding, like the first of its kind in a particular region They can be a great alternative to the more traditional finance methods.
After a project’s success has been realized through offset and demonstrated its viability, it is generally easier for similar, follow-on projects to get funding from different sources.
Offsetting has been proven by reliable studies to be a successful method to lower greenhouse gases.
Carbon Offsetting: The Cons of Carbon Offsetting
Many criticisms have been directed at carbon offsets too. Certain of them are philosophical, objecting to the idea that rich companies can purchase their way out of the carbon market, instead of taking a greater accountability for their emissions. Others argue that offsets undermine the need for more aggressive collective action, such as a carbon tax. Are offsets letting polluters free of the burden too easily?
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Other sources point to more pragmatic concerns:
Some forests that have been protected by offsets have been later found to have burned or been burned or logged. This could have been deliberate by the persons who received the offsets.
Are the credits truly necessary, is it possible that the job could have been completed without the credits?
Are carbon measurement accuracy reliable, and can the entities that keep track of them be trusted to perform an accounting that is accurate?
How do you deal with fraud?
Is global warming taking place too quickly to carbon offsets be helpful?
There are some legitimate concerns to be addressed here. Although no system is perfect however, many of these issues have been acknowledged and addressed when both carbon standards and methods evolve.
Carbon offsets are not designed to be used as a substitute for directly taking action. They are rather to be a supplement, or in some situations, as the only possible option. For instance, the airline industry makes use of many offsets, because there’s no method for commercial aircrafts to fly today without using fossil fuels. Under an international scheme called CORSIA the airlines will be able to limit emissions in 2019/2020 and promise to offset any growth in emissions starting from 2021.
Regarding the issue of forests that disappear following the qualification for offsets, this is addressed by the most recent VCS standard. The standard only allows payments to be made in the case of carbon sequestration in forests that has already happened for example, over the last decade. To limit further risk, a portion of funds paid in credits are set aside to be used in “pooled buffers” for unforeseen losses, much like the insurance policies.
Measurement is also evolving. Renewable energy projects are the easiest to measure since one needs only to check the meter. Land-use projects like forestry may be more challenging and require more sophisticated models and new technologies such as GPS, satellite imagery, and drones have proven useful in creating a more precise picture of how much carbon remains stored.
How to track and offset Your carbon footprint
Carbon offsets are common among companies. However, banks are collaborating together with tech companies to get consumers involved. For example, Swedish fintech startup Doconomy, has partnered with Finland’s Aland Bank to help regular customers comprehend the carbon impact from the majority of their purchases.
The Aland Index calculates the carbon footprint of any item being purchased by a buyer with a base of around 200 parameters. Paula DiPerna, who was pioneering in the development of the first global caps and trade program in 2003 has called the index “a game-changer” that converts intangible values into the form of a dollar. Consumers then can use the value of a dollar to offset the emissions created from an item to make their purchases carbon-neutral.
“The index was invented … in order to allow the planet to be heard in every wallet and at every point-of-sale.”
Helena Mueller is 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 aspects of personal finance management, setting a credible international standard, as well as to give the planet a voice every wallet and at every point-of-sale.”
Customers have access to the index via the DO application. The index is currently only available in Sweden, but Bank of the West teamed up along with Doconomy to bring it to the US within the 1% for account. Planet account. With the mobile banking app, you can use Aland Index is applied to transactions to calculate automatically the carbon footprint for purchases made using the 1% for the Planet debit card.
“The carbon footprint is presented in kilo or pounds emitted as well as with an estimate of the cost to society, i.e. the true cost of a a service, when the negative effects of climate change are considered for,” says Mueller. “The bank, in this case, Bank of the West, has then the choice to let their customers see the carbon footprint of transactions in terms of the week, day month, and year.”
Armed with this information consumers can take charge in reducing their carbon footprint. In the end, you cannot alter the things you can’t measure.