5 Things You Should Know About Carbon Offsets  

October 3, 2020 By Manish Dabkara

Crossing the 400 ppm mark, while only 350 ppm carbon dioxide is tolerable, is a reminder for the whole world that carbon dioxide level has been shooting up at an alarming rate in the recent years due to human activities.

For life to sustain on planet earth the right balance of carbon dioxide must be maintained in the atmosphere. Carbon dioxide being a greenhouse gas is fairly responsible for earth’s elevated temperature i.e. global warming.

Global warming is one of the major threats to human, right now. The main contribution to global warming is burning of fossil fuel which emits greenhouse gases. No matter how serious global warming seems we just can’t switch from being energy-hungry to being clean-and-green overnight. We just can’t dodge all emission that contributes to our carbon footprints. But we can compensate for the deadly carbon emission that we are doing by buying carbon credits from carbon trade exchange companies.

Carbon offsetting means compensating for the carbon dioxide pollution you are making (your carbon dioxide footprint) by preventing the same amount of pollution from happening somewhere else.

It’s like investing in projects that reduce carbon dioxide emissions of greenhouse gases to reduce their carbon footprints in a bid to save the world from drastic climate change.

Carbon offsets are normally measured in tons of carbon dioxide equivalents, one carbon offset means compensating for emitting one ton of carbon dioxide into the atmosphere by preventing a ton of carbon dioxide from entering the atmosphere elsewhere on earth.

Here are 5 things you must know about carbon offsets:

Why carbon offsetting?  

Carbon offsetting is the way to compensate for the damage done by an individual or a company by emitting carbon dioxide through any activity. Let’s say you fly on a commercial carrier from Chicago to Japan and your aircraft emitted 3.5 tons of carbon dioxide during the journey. You would then pay a carbon offset company for 3.5 tons of carbon dioxide offsets. The company would then invest your money in a project meant to reduce greenhouse gas emissions. Carbon offset project falls under four categories. Renewable energy projects such as solar, wind and hydro energy. Energy efficiency projects, such as low-energy housing and lighting. Greenhouse gas captures projects and bio sequestration projects. Where emissions cannot be entirely eliminated, many companies and individuals instead of stopping their environmentally harmful behavior, they pay money toward green schemes that seek to compensate for the damage elsewhere.

What is Kyoto Protocol?  

The Kyoto protocol was an agreement negotiated by many countries in December 1997 and came into force with Russia’s ratification on February 16, 2005. The protocol was developed under the UNFCCC- the United Nation Framework Convention on Climate Change. 169 participating countries that have ratified the Kyoto Protocol have committed to cut the emission of not only carbon dioxide but of also other greenhouse gases. India and China have inked the document, but don’t have binding targets to meet.

As a part of Kyoto Protocol, an arrangement known as The Clean Development Mechanism (CDM), which allows industrialized countries to invest in emission reducing projects in developing countries. This is one of the key platforms of international carbon trading.

Mandatory and voluntary offset markets  

Carbon offsets are currently sold in either mandatory or voluntary markets.

In the mandatory market, buyers operate within the cap-and-trade regime. The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) established a cap-and-trade system that set a total upper limit on emissions and then either allocates or auction off emissions allowances –basically, licenses to pollute a certain amount to, interested buyers. These systems are meant to achieve the greatest emissions reductions at the least cost because emitters with cheap options for reducing their emissions can sell their surplus allowances to emitters with higher reduction costs.

Voluntary market, on the other hand, does not function under a cap-trade system, and neither individuals nor companies are mandated to act. Rather, they choose to offset their emissions out of concern for the environment or to improve the company’s image. They enable businesses, governments, NGOs, and individuals to offset their emissions by purchasing offsets that were created either through the CDM or in the voluntary market.

Standards for carbon offset  

Buying a standard carbon offset that meets certain criteria when the offset is developed and sold, assures the buyer that he is making a positive contribution to the climate. A number of standards exist for carbon offsets, including the VCS, CDM and The Gold Standard. The Gold Standard is widely considered to be the highest standard in the world for carbon offsets. It ensures that key environmental criteria have been met by offset projects that carry its label. Only offsets from energy efficiency and renewable-energy projects qualify for the gold standards, as these projects encourage a shift away from fossil-fuels use and carry inherently low environmental risks.

Carbon Offsets as a carbon management strategy  

There are many misconceptions that carbon offsets are expensive and add an unnecessary expenditure to the companies. But that’s not true, many research reveals that those companies that do buy offsets are doing as a part of an overall carbon-management strategy, and they’re mostly using offsets either to tackle emissions they can’t eliminate internally or to create an internal “price on carbon” that focuses attention on emissions and accelerate reductions.

No matter how many myths exist for carbon offsetting, but it still remains a healthier way to compensate for your carbon footprints that you can’t change in any other way. Not always you need to buy carbon offsets but rather you can even start offsetting from home by catching public transports for traveling, by using bicycles, by having solar panels on the roof or a wind turbine in the backyard, by planting more and more trees and by being eco-friendly in all aspects. We need to start implementing these small changes in our lives to achieve a big and sustainable change for the world.

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