How do carbon credits and carbon offsets reduce emissions?
What are carbon credits?
A carbon credit is a permit that allows a company to emit a certain amount of carbon dioxide or other greenhouse gases. Typically, one credit allows for the emission of one ton of carbon dioxide. To conceptualize, approximately one ton of carbon dioxide is emitted in a 2,400 mile automobile drive.
What Are Carbon Offsets?
Carbon offsets can often be confused with carbon credits, but they are a way outside the ‘four walls’ of a company to tangibly reduce emissions. Carbon credits on the other hand are a mere representation and ownership of one ton of carbon dioxide equivalent that can be used, traded, sold, etc. The money used to buy such carbon offsets goes towards projects which can mainly be sorted into three types. The first type avoids greenhouse gas emissions by replacing energy from fossil-fuel sources with renewable ones, like building a wind farm. The second removes existing atmospheric emissions in ways such as planting trees, which then store the carbon in liquid or solid form. The third type captures and destroys emissions, such as methane gas capture from landfills or livestock. Researchers are looking into combining these first and third types in hope to capture methane emissions, from cattle specifically, and reuse it as a renewable energy resource. Companies can purchase carbon offsets in order to receive more carbon credits; in a way they are preemptively removing their emitted greenhouse gases. Another neat feature of carbon offsets is that our atmosphere has no borders. Therefore, trees can be planted anywhere around the world to offset large emissions in a more urban area. Several foundations focus on this idea for their carbon offset programs, such as South Pole. Furthermore, carbon offsets are often associated with air travel, since plane rides impact the climate so negatively. Although carbon offsets are a great choice, the first step is to reduce your individual emissions, stopping the issue before it exists. Curious on what your emissions currently are? Fill out the EPA’s Carbon Footprint Calculator, as well as check out some tips from COTAP on how to reduce your carbon footprint.
How Do Carbon Credits Reduce Emissions?
Since 1990 and the passage of the U.S. Clean Air Act, the United States has been regulating energy emissions, where the first version of carbon credits was created. Ideally, the amount of carbon credits awarded to a company is reduced year by year, thus requiring the company to reduce their pollution over time.
Can carbon credits be traded?
Carbon credits can be sold amongst companies, incentivizing the company to emit less greenhouse gases. They can sell their unused carbon credits to other companies who do not have enough credits for their amount of emissions. The carbon credit system is called “Cap-And-Trade,” because the net amount of credits is capped annually, but those who own the credits have the ability to trade them around.
Local Carbon Credits
There are 12 states that have implemented their own cap-and-trade programs to reduce greenhouse gas emissions. Ten of them are Northeast states that join together through the program Regional Greenhouse Gas Initiative (RGGI). California has its own program initiated in 2013 to control the emissions of the state’s electric power plants, industrial plants, and fuel distributors. CA claims its program is the fourth largest in the world after the European Union, South Korea, and the Chinese province of Guangdong.
Global Carbon Credits
Who enforces Carbon Credits?
The enforcement of carbon credits has been considered one of its weaknesses, since it depends on the country. Each country has its own limits and trading rules. For the countries that have joined the Kyoto Protocol, greenhouse gas-emissions trading is mandatory. The EU’s trading plan, however, issued too many permits between 2005 and 2007, flooding the market, and thus removing incentives for companies to trade. In the United States, which did not agree to the Kyoto Protocol, corporate participation in carbon credit trading is voluntary. One well known set up is the Chicago Climate Exchange.
How does getemissionsdata.com relate to carbon credits?
The carbon credit system aims to reduce pollution by slowly taking away the net amount of carbon that can be emitted. Additionally, it is a way to control emitters by capping the amount of released carbon. However, who keeps track of all these emissions and ensures companies stay within their range? Typically, a large agency, such as the California Air Resource Board (CARB) keeps tabs on each of the emitters. Getemissionsdata.com, however, has the power to watch each emitter much more closely and ensure they stick to their amount of credits with ease of our dashboard app. Getemissionsdata.com can help the emitters by giving them the ability to check their emissions level and see how many credits they have used, and whether they have excess to sell or need to buy more. Our services can also help the regulators, such as CARB, by double checking their recorded values.
The Future of Carbon Credits
The carbon credit system has always focused on the top emitters such as large oil and gas companies, yet as our greenhouse gas levels get closer to a point of no return, there has become a greater need for individuals to watch their carbon footprint. There is no system that tracks consumers’ emissions, yet what if one were put in place? Every day humans make decisions with our planet’s well being in mind, biking to work, using reusable bags, cutting out red meat. What drives a person to make these choices? Simply their knowledge that it is the right thing to do. This is a commendable act, however, what if there was more incentive? A system like that of the carbon credit could be implemented for individuals or households, to encourage people to make conscientious decisions and reward those who already were.
