Carbon Credits FAQs * Understanding Carbon Credits * Carbon Offsets * Cap and Trade * Energy Credits * Carbon Footprint

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Carbon Credits: FAQ's

carbon credits faqs

For most of us, carbon credits, cap-and-trade, carbon footprint, and carbon offsets might as well be another language - all of this is very confusing and over our heads to say the least. But, we all need to keep up with the ever changing landscape of environmental issues and concerns. Where do you go to get the information you need in a way you can understand it? Right here! Below are the most commonly asked questions about carbon credits and answers to these questions in a language you will be able to understand!

How Does Carbon Dioxide Contribute to Climate Change?

Carbon dioxide is a heat-trapping gas, so the more we emit, the warmer the planet gets. Increasing global temperatures lead to:

  • Melting of glaciers and ice floes, not only displacing marine life, but also causing a rise in sea level and flooding of coastal cities.
  • Warming sea surface temperatures, which increases the strength of hurricanes.
  • Damage to coral reefs and alpine meadows, which threatens the survival of species dependent on these eco-systems.
  • Increase in pest and mosquito-born diseases that thrive in warmer temperatures.

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How Much Carbon Dioxide is Safe to Have in our Atmosphere?

The Earth has a natural "carbon cycle" that has maintained the perfect balance of carbon dioxide in the air for 650,000 years - approximately 275 parts per million (ppm). We know this by analyzing the content of ice cores. Only in the last couple of hundred years - post-Industrial Revolution - has the CO2 content in our atmosphere exceeded the planet's normal range so significantly. Today the Earth's CO2 content is 392 ppm, and increasing an average of 2 parts per year. But scientists say the only way to preserve life on this planet as we know it today is to keep CO2 content in the atmosphere below 350 ppm. Return to Top

What is Cap-and-Trade?

Cap-and-trade is a regulatory process that places a "cap" on the greenhouse gas emissions industries are allowed to produce. Companies that come in under the cap are entitled to "trade" (i.e., sell) their leftover emission allowances to other companies that have exceeded their limit. Countries that ratified the Kyoto Protocol engage in this cap-and-trade system. The United States is notoriously not among them, but there are other U.S. cap-and-trade programs instituted by regions and states. Return to Top

Carbon Advice Group

What is a Carbon Credit?

A carbon credit is a value assigned to a reduction or offset of greenhouse gas emissions. It is a generic term for any tradable certificate or permit representing emissions reductions equaling one ton of carbon dioxide or carbon dioxide equivalent, such as a carbon allowance or a carbon offset. Return to Top

What is the Difference Between a Regulated Carbon Market and a Voluntary Carbon Market?

A regulated carbon market is one in which its members are legally obligated to cut emissions. When members of regulated carbon markets buy carbon credits they are called allowances (nations who signed the Kyoto Protocol, for example). Each member is allowed to emit a certain amount of carbon. Those who exceed the goal and have allowances (or credits) leftover sell these credits into the carbon pool. These credits are then bought by other members of the carbon market who exceeded their carbon allowances and a way of making up for it.

A voluntary carbon market is one in which its members are under no legal obligation to cut emissions, but choose to do so of their own accord. When members of voluntary carbon markets buy carbon credits, they are called offsets. Both businesses and individuals may fall into this category. After adding up your personal carbon footprint using a carbon calculator, you can buy an equal amount of carbon offsets so you can become carbon neutral. Return to Top

What is the Difference Between a Carbon Offset and a Renewable Energy Credit (REC)?

Renewable Energy Credits (REC's) is a term often used interchangeably with carbon offsets. However, unlike a carbon offset that represents one ton of emission reductions, a renewable energy credit represents 1 MWh of energy generated by a renewable energy source, such as wind, solar and hydroelectric power. Return to Top

How Can I Reduce My Carbon Footprint?

After calculating your carbon footprint, there are a number of steps you can take to reduce it. First and foremost, go through your life with a fine-tooth comb, making greener choices in every way possible. Our comprehensive Green Checklist articles can help. [link to the Checklist] Then re-calculate your footprint. However many tons of carbon you emit per year is the number of offsets you need to purchase to, theoretically, bring your carbon footprint to zero. Return to Top

How Do I Know What Carbon Offsets to Purchase?

When buying carbon offsets, choose companies that adhere to the strictest standards, including third-party 1) certification, 2) verification and 3) auditing of projects that are:

  • Real - offsets that have already occurred.
  • Additional - offsets that would not have occurred without the offset project.
  • Permanent - lasting or guaranteed to be replaced should losses occur.
  • Verifiable - offsets that can be quantified, monitored and verified.

Avoid any company that judges its offsets on the "performance standard". Instead of limiting projects to those that would not be possible without the carbon market, the performance standard counts as offsets any reduction of energy that is below a certain benchmark. Yes, the project may be one that is environmentally-friendly, but it is one that would have happened anyway, regardless of carbon market support. Return to Top

What Information Should be Included on My Carbon Offset Certificate?

As outlined by the American Carbon Registry, a carbon offset certificate should include a serial number unique to the offset, as well as total tonnage purchased, the verifier's name and signature, the project location, the owner's name and address, and a vintage date. Return to Top