Carbon offset is a method that allows funds to be directed towards projects that aid in reducing global emissions. People or companies often purchase carbon offsets, instead of cutting their carbon footprints when emissions appear inevitable, or they use both methods to help their efforts to reduce emissions go further.
Carbon offset projects consist of efficient stoves for cooking in villages and bio-gas production using organic matter, and a range of initiatives aimed at reducing deforestation and regenerating forests that have been damaged.
The procedure of certifying a project to be eligible for carbon offsets isn’t an easy task. Carbonbay is involved in shepherding initiatives through the Byzantine regulatory maze which have been put in to the United Nations’ Clean Development Mechanism (CDM) to make sure that not only emissions reductions are legitimate and legal, but also that there is no existing funding for projects that is similar to this. This usually means that they’re not the norm and are unlikely to be successful without credits. Credits for emission reduction allow projects to be compensated for each metric ton of carbon emissions sucked up. They can be certified through CDM or other standards that are respected such as The Gold Standard, and the Verified Carbon Standard (VCS).
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“Carbon offset … aids environmental projects that aren’t able to get funds by themselves.”
Carbon Offsetting: The Pros of Carbon Offsetting
Carbon offset has advantages both sides of the process. It helps environmental projects that aren’t able to get financing on their own and also gives businesses the chances to lower the carbon emissions of their operations.
A lot of companies aren’t able to reduce their carbon footprint as they’d like to. In certain cases, this is due to the fact that their footprint is already tiny (e.g. software companies) however they would like to expand their reach. Other industries, like heavy equipment, and ocean transportation, simply do not have low-carbon alternatives to meet their needs currently. Through helping fund environmental projects that cut emissions, companies can make more up for the emissions they aren’t able to eliminate themselves.
Although the majority of offset purchases are not required however, there are certain jurisdictions where offset purchases are required to meet local regulations and standards to be able to avoid penalty. Another benefit of using the offset method. 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 are “carbon zero” or even “carbon positive.” They also provide an opportunity for these businesses to monitor their carbon footprint. A lot of consumers are now more comfortable doing business with these companies.
Carbon offset provides valuable resources for projects that typically capture carbon through forests and other methods or reduce emissions, like renewable energy generation or the use of clean 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 and provide a viable alternative to conventional financing mechanisms.
After a successful project is achieved by offsetting and has proven to be viable it’s generally simpler for follow-on, similar projects to be able to draw funding from other sources.
Studies have proven offsetting to be a successful method to cut greenhouse gas emissions.
Pros and Cons of Carbon Offsetting
A variety of criticisms have been directed at carbon offsets, as well. Certain of them are philosophical and oppose the notion that rich companies can purchase their way out of the carbon market, instead of taking on greater responsibility for their carbon emissions. Some argue that offsets weaken the need for more aggressive collective action, like carbon taxes. Are offsets letting polluters free of the burden too easily?
Others , however, point to more practical issues:
Certain forests that are protected by offsets were later discovered to have burned or cut down. It could or might not be deliberate by those who received the offsets.
Are the credits really necessary, and could the work be completed without the credits?
Are carbon measurements reliable, and can the organizations that monitor these measurements be relied upon to perform the right accounting?
What is the problem with fraud?
Are global warming occurring too quickly for carbon offsets to help?
There are valid concerns here. Although no system is perfect however, many of these issues have been recognized and addressed when both carbon standards and practices change.
Carbon offsets aren’t intended to replace immediate action but instead as a complement or in some instances, as the sole alternative. The aviation industry is an example of this. It uses many offsets, because there is no feasible method for commercial aircrafts to fly today without using fossil fuels. In the international scheme called CORSIA the airlines will be able to stop the emission levels for 2019/2020 and have pledged to offset any increase in emissions starting from 2021.
Concerning forests disappearing after qualifying offsets, this issue is addressed by the most recent VCS standard, which permits payments to be made in the case of carbon sequestration in forests that has already taken place in the past decade. To reduce risk, a portion of the credits paid are put aside as “pooled buffers” to protect against unexpected damages, similar to the insurance policies.
The measurement process is also changing. Renewable energy projects are the easiest to quantify, as you only need to check the meters. Land-use projects like forestry might be more difficult however, models are getting better and new technologies such as GPS and satellite imagery drones are now useful in providing a clearer image of the amount of carbon that remains stored.
How to track and offset Your carbon footprint
Carbon offset is a common practice in many businesses. However, banks are working with tech companies to make consumers more involved. For instance, Swedish fintech startup Doconomy has joined forces together with Finnish Aland Bank to help regular consumers understand the environmental impact of the majority of purchases.
The Aland Index calculates the carbon footprint of every item bought by a consumer using more than 200 parameters. Paula DiPerna, who was key in the creation of the first global trading system for cap-and trade in the year 2003 describes the index “a game changer” that converts intangible value into the form of a dollar. Consumers then can use the value of a dollar 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
As per Helena Mueller, head of Aland Index Solutions and co-founder of Doconomy, “the index was designed to create a common language that addresses climate change in all aspects of personal finance management, establishing a reliable global standard and also to give the world a voice in every pocket and at every point of sale.”
Customers have access to the index via the DO application. It’s available only in Sweden however, Bank of the West teamed up together with Doconomy in order to make it available to US in conjunction with the 1 percent for account. Planet account. Through the mobile banking application it is possible to use it is possible to use the Aland Index is applied to transactions in order to calculate the carbon footprint of transactions that are made using the 1% for Planet debit card.
“The carbon footprint is shown in kilo or pounds produced as well as Carbon’s social costs, i.e. the true cost of a product or service, after the negative impact of climate change are accounted to be accounted for” Mueller says. Mueller. “The bank in this instance, Bank of the West, can then assist their customers in understanding the carbon footprint of transactions by the day, week month, year.”
Armed with this information, individuals can take control in reducing their carbon footprint. In the end, it’s impossible to change the things you can’t measure.