What is carbon offsetting?
Also known as carbon credits or Verified Emission Reductions, carbon offsets are an affordable and efficient means to take action in the fight against climate change.
What are carbon offsets?The World Resources Institute defines a carbon offset as “a unit of carbon dioxide equivalent (CO2e) that is reduced, avoided, or sequestered to compensate for emissions occurring elsewhere”. [1] Carbon offsets are measured in metric tonnes of carbon dioxide equivalent (tCO2e) because carbon dioxide (CO2) is the most common GHG emitted by human activity. CO2e is a quantity that describes, for a given mixture and amount of GHG, the amount of CO2 that would have the same global warming potential. For example, one tonne of methane has the same global warming potential as 25 tonnes of CO2 over a 100-year period. [2] What are offset types?Offsets are typically achieved through the financial support of projects that reduce or absorb GHG emissions in the short- or long-term. There are many types of carbon offsets, including forestry projects, renewable energy (such as wind farms, biomass energy, or hydroelectric dams), energy efficiency projects, the destruction of industrial pollutants or agricultural byproducts, and the destruction of landfill methane. Taking Root’s offsets are generated through social reforestation in Nicaragua, according to the Plan Vivo Standard. For more information on the different offset types, and the most common standards established to ensure quality carbon offset projects, you can read the World Wildlife Fund’s comparison of carbon offset standards (2008) (Download PDF).
What is the carbon market?There are two markets for carbon offsets, the compliance market and the voluntary market. “Compliance markets are created and regulated by mandatory regional, national, and international carbon reduction regimes, such as the Kyoto Protocol and the European Union’s Emissions Trading Scheme. Voluntary offset markets function outside of the compliance markets and enable companies and individuals to purchase carbon offsets on a voluntary basis.” [3] The Compliance Carbon MarketIn the larger, compliance market, companies, governments or other entities buy carbon credits in order to comply with caps on the total amount of carbon dioxide they are allowed to emit. Under an umbrella UN system, various countries around the world, most notably member of the European Union have implemented carbon markets in order to keep below the emission targets that their countries have mandated. There are various markets that have come into existence in recent years. In countries such as Australia, USA, EU and New Zealand. In 2009, the total value of the carbon market was estimated at USD $144 billion, representing about 8,7 billion tCO2e reductions. [4] The Voluntary Carbon MarketIn this much smaller, voluntary market, individuals, companies or governments purchase carbon offsets to mitigate their own GHG emissions from transportation, electricity use and other sources. While research shows that offsetting in anticipation of upcoming regulations is one motivation of buying in the voluntary market, the biggest driving forces in the corporate world include corporate social responsibility, public relations and branding, and good will of the general public and their investors. [5] In 2010, about USD $424 million worth of carbon offsets were purchased in the voluntary market, representing about 131 million tonnes in CO2e reductions. [6] Taking Root sells 100% of its offsets in the voluntary carbon market. What is climate change?Climate change is an rise in the Earth’s average temperature caused primarily by human activities, especially those that increase the level of greenhouse gases (GHG) in the atmosphere, such as deforestation and the burning of fossil fuels. The rise in global temperature is disrupting weather patterns, endangering ecosystems and arguably poses the greatest threat to our planet’s wellbeing today. While the impacts of climate change are felt around the world, it is the countries in the global south that are experiencing the worst of it and, due to poverty and a shortage in resources, have a lower capacity to mitigate or adapt to climate change. In order to avoid the irreversible and potentially catastrophic impacts of climate change, scientists urge us to prevent the global mean temperature from rising 2 degrees Celcius above pre-industrial levels. To do this, we need to dramatically reduce the amount of GHGs in the atmosphere by curbing our emissions, offsetting, and shifting away from fossil fuels. References[1] Goodward, Jenna; Kelly, Alexia (August 2010). Bottom Line on Offsets. World Resources Institute. Retrieved 2010-09-08. |
