Carbon credits

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Carbon credits are sold by companies that 'generate the credit' to allow consumers (or other companies) to offset their power consumption and carbon emissions. For example, some people choose to purchase carbon credits to offset the carbon emissions associated with an trip by air.

However, buying carbon credits (offsets) to alleviate the damage done to the environment by fossil-fuel-driven cars, air travel and electric appliances is not regarded as a sustainable long-term strategy.

Some companies claim to be "carbon neutral" through purchasing carbon credits.

However, such claims should take into account the following points:

  • There are no mandatory standards for what carbon neutrality actually entails. As a result, claims by companies that they are going carbon neutral might be meaningless and misleading.
  • Many activities are overlooked when companies calculate their carbon emissions. Businesses, for example, can start by calculating their direct operational emissions from electricity, gas and transport use. However, many fail to do an audit calculating emissions from other sources such as paper, waste generated and outsourced activities.

Accreditation and link to emission reductions

  • There is no single (or mandatory) accreditation for suppliers of carbon credits. Not all suppliers are accredited.
  • Carbon credits based on the installation of new clean renewable energy generation can be linked directly to carbon emission reductions
  • Carbon credits based on tree plantations do not have a guaranteed or direct link to carbon emission reductions.

The Kyoto Protocol has sanctioned offsets as a way for governments and private companies to earn carbon credits which can be traded on a marketplace. Protecting native forests from logging across the globe would be an effective means of avoiding greenhouse gas emissions, although this is not currently classified as an offset.

See also

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