Carbon offsets are a method by which funds are directed to projects that help reduce global emissions. Companies or people often buy carbon offsets, instead of cutting their carbon footprints in instances where emissions appear impossible to avoid, or use both methods to help their efforts to reduce emissions go further.
Carbon offset projects include efficient cook stoves in rural villages as well as bio-gas produced from organic matter, as well as a wide range of initiatives aimed at reducing deforestation or regenerating degraded forests.
The process of certifying an initiative as eligible for carbon offsets isn’t a simple process. Carbonbay is involved in shepherding companies through the Byzantine maze of regulations that were put in to the UN’s Clean Development Mechanism (CDM) to make sure that not only emissions reductions are legitimate, but that there is no pre-existing funding available for projects such as this. That usually means that they’re a radical departure from normal business practices and are not likely to be successful without credits. Credits for emission reduction allow projects to receive compensation for every metric tons of carbon emissions eliminated. They are able to be certified as part of CDM or other respected standards, including The Gold Standard, and the Verified Carbon Standard (VCS).
“Carbon offset … aids environmental projects that don’t have funds on their own.”
Pros and Cons of Carbon Offsetting. Pros of Carbon Offsetting
Carbon offsetting has benefits both sides of the process. It assists environmental projects that cannot get funding on their own and it also provides businesses with a better chance to decrease their carbon footprint.
A lot of companies aren’t able to reduce their carbon footprints as they’d like. In some instances, it is because their footprint is already very small (e.g. software company) But they’re looking to expand. Other industries, like heavy equipment or ocean shipping, simply do not have low-carbon alternatives for their customers in the moment. Through aiding in the financing of environmental projects that cut emissions, companies can make their way up for emissions they can’t eliminate themselves.
Although the majority of offset purchases are not required however, there are certain jurisdictions in which they are necessary to comply with local regulations and standards and be able to avoid penalties. This is an additional benefit of using the offset method. It allows regulators to enforce environmental standards.
Other businesses use offsets in order to prove that all or some portion of their operations are “carbon neutral” or even “carbon negative.” It also provides the structure needed for these companies to keep track of their own carbon footprint. Many consumers are now more comfortable doing transactions with companies with offsets.
Carbon offset can be a valuable resource to projects that generally either capture carbon through forest growth and other mechanisms or reduce emissionsthrough renewable energy generation, or using clean energy appliances. By focusing on projects that are less likely to receive other types of funding, such as a first-of-its-kind in a given region They can be a great alternative to the more traditional financing mechanisms.
After a successful project is completed through offsetting and demonstrated its viability it’s generally more straightforward for follow-on projects to attract other funding sources.
The results of studies that have been conducted have shown offsetting to be a viable method to reduce greenhouse gases.
The Cons of Carbon Offsetting
Several criticisms have been aimed at carbon offsets, as well. Certain of them are philosophical disapproving of the idea that corporations with wealth can buy their way out, instead of taking a more responsibility for their carbon emissions. Some argue that offsets weaken the demand for more ad-hoc actions, such as carbon taxes. Are offsets letting polluters get off the hook too easily?
Others focus on more practical concerns:
Some forests that have been protected by offsets have been later found to have burned or cleared of wood. This could have been deliberate on the part of the people who received the offsets.
Are they really required, or could the project have been completed without them?
Are carbon measurements reliable, and can the companies that are monitoring them be trusted to conduct an accounting that is accurate?
What is the problem with fraud?
Are global warming occurring too fast to allow carbon offsets to prove useful?
There are some very legitimate concerns to be addressed here. While there is no perfect system but many of these concerns were recognized and are being addressed as carbon standards and practices evolve.
Carbon offsets aren’t intended to replace the direct actions, but instead to be a supplement, or in some cases, as the only alternative. For instance, the airline industry employs numerous offsets because there is no feasible method for commercial aircrafts to fly today without the use of fossil fuels. Under an international scheme called CORSIA that will see them reduce emissions for 2019/2020, and promise to offset any growth in emissions starting from 2021.
Concerning forests that disappear following the qualification offsets, this issue can be addressed with the latest VCS standard, which only permits payment to be made to carbon sequestration in forests that has already occurred for example, over the last decade. To reduce risk, a portion of funds paid in credits are put aside as “pooled buffers” to protect against unexpected losses, much like an insurance plan.
Measurement is also evolving. Renewable energy projects are easiest to measure since you only need to check the meters. Land-use projects like forestry may be more challenging However, the models are becoming more accurate and the use of technologies such as GPS and satellite imagery drones are now useful in providing a clearer understanding of the amount of carbon remains stored.
How You Can Retract and Offset Your carbon footprint
Carbon offsetting is common for businesses. But banks are working together with tech companies to engage consumers in. For example, Swedish fintech startup Doconomy, has partnered to Finland’s Aland Bank to help regular customers comprehend the carbon impact of the majority of purchases.
The Aland Index calculates the carbon footprint of any item being bought by a consumer based on some 200 parameters. Paula DiPerna, who was key in the creation of the world’s first cap and trade carbon credits system in 2003, calls the index “a game changer” that converts intangible value into an amount in dollars. The consumer can then utilize the dollar value to offset the emissions generated by the item, making purchases carbon neutral.
“The index was invented … for the purpose of make the planet heard in every purse and at every point-of-sale.”
Helena Mueller, chief of Aland Index Solutions and co-founder of Doconomy
Based on Helena Mueller, head of Aland Index Solutions and co-founder of Doconomy, “the index was developed to establish a shared standard for climate-related issues in all aspects of personal finance management, and to establish a trustworthy global standard, in addition to giving the planet a voice every purse and at every point of sale.”
Customers are able to access the index using the DO app. The index is currently only available in Sweden however, Bank of the West teamed up together with Doconomy in order to make it available to US within its 1 percent contribution to Planet account. Planet account. With the mobile banking app you can use there is an Aland Index is applied to transactions to calculate the carbon footprint of purchases made with the 1% of the Planet debit card.
“The carbon footprint is measured in kilo or pounds produced as well as Carbon’s social costs, i.e. the true cost of a product or a service, once the negative impact of climate change is accounted for,” states Mueller. “The bank in this instance, Bank of the West, is then able to assist their customers in understanding the carbon footprint for each transaction by day, week month, and year.”
Armed with this information individuals can take control for their environmental footprint. Since you can’t change what you cannot measure.
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