Carbon Offsetting
Carbon offsetting began in 1989 with an agriforest in Guatemala. Its short history involves three development phases spurred by policy and corporations committing to carbon neutrality.
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Key events include the 1995 Kyoto Protocol, the 2005 EU Emissions Trading Scheme, and the 2015 Paris Agreement.
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The benefits of carbon offsets go beyond that:
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Improves Air Quality: Degradation of air quality as a result of carbon emissions is a serious issue. Reducing C02 emissions would lead to improved public health in terms of asthma, respiratory allergies, airway diseases, and lung cancer.
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Protects Ecosystems: Protecting forest habitats, agricultural land, aquatic ecosystems, and biodiversity has been linked with improved human health and cleaner air, water, and food.
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Supports Green Jobs:
The renewable energy sector employed 11.5 million people worldwide in 2019, with job growth expected to continue to increase as we realize just how beneficial renewable energy is for our environment.
Carbon offsets play an important role in mitigating the effects of global climate change by reducing carbon emissions beyond what we each can achieve through individual actions.
The money spent on carbon offsets can be put toward emission reduction projects ‒ such as a solar farm or the planting of a new forest. ◦ The purchase and sale of carbon offsets are conducted through carbon offset markets.
There are two types of carbon offset markets: voluntary and compliance. In compliance markets, government regulations are enacted for firms to reduce their emissions. Some of the most active compliance markets can be found in California and Europe
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Measuring Carbon Offsets Quality
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Carbon offsets are a simple and cost effective way to reduce emissions. Carbon Offsets quality is fundamentally defined by the offset program issuing the credits and project attributes. In the last 30 years, countries have failed to draw up robust rules. As a result, the many standards available make the task of choosing quality offsets complex.
The most common carbon offset standards are:
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The Clean Development Mechanism (CDM),
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The Climate Action Reserve (CAR),
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The Verified Carbon Standard (VCS),
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The American Carbon Registry (ACR)
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The Gold Standard (GS).
The carbon offset life cycle
Carbon offsets are a simple and cost effective way to reduce emissions. Carbon Offsets quality is fundamentally defined by the offset program issuing the credits and project attributes. In the last 30 years, countries have failed to draw up robust rules. As a result, the many standards available make the task of choosing quality offsets complex.
Step 1
Project development
Create and establish a project to reduce and remove CO2 from the atmosphere or prevent new emissions.
Step 2
Verification
An auditor evaluate the project to see if it adheres to program that created according to the global offsetting standards.
Step 3
Carbon credit issuing
If the project meet the program offset requirements and the standard- setter will issue and list credit for project for sale. One credit is typically worth one metric ton of CO2.
Step 4
Initial sale
A business / Individual looking to offset its emissions purchases project carbon credits via exchange platform.
Step 5
Secondary market
If the offset purchasers doesn’t use the carbon credit, he can sell it again.
Step 6
Retirement
When the credit owner indicates that he want to use the carbon credit to offset emissions, the credit retired by the program and it can no longer be traded.