What are Carbon Offsets
Upon third party verification of the project's greenhouse gas emission reductions, tradable units are issued with each unit representing a reduction of 1 tonne of carbon dioxide equivalent. This is sometimes referred to as MTCDE for Metric Tons of Carbon Dioxide Equivalent. These tradable units are interchangeably called certificates, credits, offsets and units.
The logic behind the "carbon market" is that participants can trade emission reductions. This means that originators of carbon offsets can sell them to buyers who are legally required to reduce their emissions or who would like to do so on a voluntary basis. The largest market by far is the European Union Emission Trading Scheme (EU ETS) that enable large emitters of greenhouse gases, typically power producers and airlines, to trade emission rights. The second largest market is the Kyoto Protocol's Clean Development Mechanism whereby developed countries invest in greenhouse gas reducing projects in developing countries. In contrast to these regulated (compliance) markets, volumes are much smaller in the voluntary offset market where consumers and companies can purchase offsets to neutralize their climate impact.
As an individual you can compensate for your own greenhouse gas emissions by purchasing offsets from a variety of different types of projects around the world including renewable energy, afforestation and reforestation, energy efficiency and the capture of greenhouse gases. Given that greenhouse gases become evenly distributed across the atmosphere, regardless of the origin of the emissions, it does not matter where a reduction is made as long as it is verifiable.
To learn more, we suggest that you take a look at Wikipedia's carbon offset entry.
Why should I purchase offsets?
We are collectively responsible for climate change and we need to act fast in order to avoid worst case scenarios. Despite the slow progress in terms of international climate treaties between countries, we remain optimistic that most people want to be part of the solution to climate change rather than being part of the problem. By becoming a CarbonStory user, you join a growing movement of people who are not content with waiting for politicians to sort things out. By taking the small step to offset your own greenhouse gas emissions you are part of the solution to the climate change. By using the calculators on CarbonStory, you also gain valuable insights into the distribution of your own greenhouse gas emissions. We believe this may also encourage you to take action to reduce your emissions.
Isn't buying offsets a form of cheating?
There are some persons who argue that purchasing offsets is a form of cheating. There are even those who argue that the offset market is similar to the sale of papal indulgences in Medieval Europe (i.e. you pay to cancel out your sins). The argument goes that persons should focus on reducing their own emissions rather than paying for others to make reductions. We think this argument is flawed and misleading for the following reasons:
- A tonne of greenhouse gases is always a tonne of greenhouse gases regardless of where the reduction has taken place. This means that any verifiable reduction is beneficial from the perspective of mitigating climate change.
- It is very difficult for individuals to reduce all of their greenhouse gas emissions given the embedded "carbon" associated with your consumption of electricity, water, transportation, products and food. It is not realistic to expect that most persons will manage to reduce their own emissions to zero. Hence, if it is easier for someone else to implement a greenhouse gas reduction it is logical that you purchase offsets from them as the overall climate impact will be the same. Given that greenhouse gases are distributed evenly in the atmosphere the only thing that matters is that greenhouse gases are reduced – not who makes the reduction.
- Many commentators who attack offsets are not in fact "carbon neutral" themselves (just ask them). They call either for drastic, back to the Stone Age, lifestyle changes or for difficult to implement global agreements to tackle climate change. In comparison, offsets allow you to make a positive difference to a better future already today without waiting for diplomats to negotiate complex international treaties. We also believe that the process of calculating your footprint will make you think about personal emission reductions.
What are the different types of offset projects?
CarbonStory provides you with the possibility to personalize your offsets based on project type, geographic location, verification standard, social co-benefits and price level. The major types of projects are explained below:
Afforestation, reforestation and agroforestry
Forests are major "carbon sinks" sequestering carbon dioxide from the atmosphere. This is an effect of photosynthesis whereby trees and plants "breathe in" carbon dioxide in order to grow. The more they grow, the more CO2 is captured. By expanding the forest cover, the planet's capacity to absorb carbon dioxide is increased. This can take the form of planting trees in new areas (afforestation), replacing trees that have been taken down (reforestation) or avoiding planned deforestation.
Renewable energy projects substitute for the burning of fossil fuels. By having more wind, solar, hydro, biomass, biogas and geothermal power, there are less greenhouse gas emissions compared to the baseline where countries would just burn more coal, gas and coal instead. So by sponsoring these projects, less emissions occur than would otherwise have been the case.
The cleanest (and cheapest) energy is energy never used. To capture this, Amory Lovins of the Rocky Mountain Institute has coined the term "negawatt". Energy efficiency projects reduce the amount of energy consumed compared to base case scenarios.
Greenhouse gas capture
Greenhouse gases are released into the atmosphere as a result of extraction of oil, industrial processes and landfills. Some offset projects capture these greenhouse gases and convert them to fuel. In some cases this results in a double impact as there is a reduction of direct emissions into the atmosphere and also a replacement of dirtier fuels.
What are the different verification standards?
There are several different standards available for verifying greenhouse gas offsets. The underlying methodology is often based on the rulebook for the Kyoto Protocol's Clean Development Mechanism. At CarbonStory, we have chosen to only include offsets verified according to the standards of reputable third parties including:
Offset projects differ in their orientation towards social co-benefits. Project classified as having social benefits typically bring substantial sustainable development benefits to local communities in addition to achieving greenhouse gas reductions. Such projects are also less likely to have generated an adverse impact on local communities (e.g. displacing farmers to build a hydro power dam). Projects certified according to the Gold Standard and Plan Vivo standard are required to demonstrate co-benefits while this is optional for VCS projects. The price will generally be higher for projects with co-benefits and the project developers will also usually have made a greater effort to produce photographs and videos.
For more information, we suggest that you visit this very good site provided by the Stockholm Environmental Institute and the Greenhouse Gas Management Institute.
What is retirement of offsets?
When carbon offsets are verified, the units are entered into official registry accounts maintained by various financial services intermediaries including Markit Environmental, APX, NYSE Blue, American Carbon Registry and CDC Climat. Following from this, the units can be traded similarly to shares on a stock market and the registry keeps track of the ownership of different units.
To actually make an offset, it is required that the units are officially retired in the registry accounts. This means that they are permanently withdrawn and cannot any longer be traded. This policy is in place to prevent fraudulent practices where the same offset unit is sold to multiple customers.
Official registry accounts
How can I be sure that the offsets I buy are for real?
All offset credits sold through CarbonStory are held and retired in official registry accounts. Our database keeps track of the available inventory of carbon offsets to ensure that we never sell more credits from a particular project than we have purchased from project developers. As current registry solutions do not allow for direct integration with CarbonStory's database, we periodically retire offset credits held in registry accounts to reconcile with the sale of offsets to our users. In some cases, we also retire credits in the registry accounts in advance of selling carbon offsets to CarbonStory’s members; this is especially the case when we source offsets in small quantities or if registry providers require us to retire credits within a certain time period. To provide full transparency to CarbonStory’s members, you can view evidence of our retirement of credits here [insert link to transparency page]
What is the relationship between my own greenhouse gas footprint and the offset projects available on CarbonStory?
Your greenhouse gas footprint is an estimate of the total greenhouse gas emissions associated with the production, transportation, usage and disposal of all products and services you consume during a given time period. As it would be far too cumbersome to actually measure the emissions, it is common practice to use national averages and activity-specific emission factors. The resulting footprint is an estimate of your environmental damage in the climate change category measured as metric tons carbon dioxide equivalents (MTCDE). Once you have an estimate of the climate damage you are causing, efforts can be made to either reduce your impact through lifestyle changes or to offset your emissions.
What kind of certificate will I receive after I have purchased offsets with CarbonStory?
Whenever you purchase offsets through CarbonStory, your purchases are logged in our database and you can access your records under the "Certificates" tab on the My Account page. You have the option to download your carbon certificates in PDF format.