Carbon offset

smoke) from such fuel-efficient stoves has not been addressed. By purchasing the allowances that power plants, oil refineries, and industrial facilities need to hold to comply with a cap, voluntary purchases tighten the cap and force additional emissions reductions. Once it has been accredited by the UNFCCC a carbon offset project can be used as carbon credit and linked with official emission trading schemes, such as the European Union Emission Trading Scheme or Kyoto Protocol, as Certified Emission Reductions.

These pumps are used by farmers, using human power, in place of diesel pumps. In 2006, about $5.5 billion of carbon offsets were purchased in the compliance market, representing about 1.6 billion metric tons of CO2e reductions. In the much smaller, voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources.

Fuel-efficient cook stoves can reduce fuel wood consumption by 30 to 50%, though the warming of the earth due to decreases in particulate matter (i.e. Some providers obtain independent certification that their offsets are accurately measured, to distance themselves from potentially fraudulent competitors.

A carbon offset is a financial instrument aimed at a reduction in greenhouse gas emissions. The protocol established the Clean Development Mechanism (CDM), which validates and measures projects to ensure they produce authentic benefits and are genuinely additional activities that would not otherwise have been undertaken.

Approved offsets have to demonstrate the following criteria: The first company to qualify for the scheme was Clear, followed by Carbon Footprint, Carbon Passport, Pure, British Airways and Carbon Retirement. The Australian government is currently in a consultation period on the regulation of Carbon Offsets. 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.

For example, people who earn their livelihoods from collecting firewood and selling it to households could become unemployed if firewood is no longer used. Organizations that are unable to meet their emissions quota can offset their emissions by buying CDM-approved Certified Emissions Reductions. Offsets may be cheaper or more convenient alternatives to reducing one s own fossil-fuel consumption.

This is known as an indirect offset (because the reduction doesn t take place at the project site itself, but rather at an external site), and some controversy surrounds the question of whether they truly lead to additional emission reductions and who should get credit for any reductions that may occur. Some offset projects consist of the combustion or containment of methane generated by farm animals or other industrial waste. The huge profits provided incentive to create new factories or expand existing factories solely for the purpose of increasing production of HFCs and then destroying the resultant pollutants to generate offsets.

However formal standards for quantification exist based on collaboration between emitters, regulators, environmentalists and project developers. Deforestation, particularly in Brazil, Indonesia and parts of Africa, account for about 20% of greenhouse gas emissions.

There is a class of mechanisms referred to as REDD schemes (Reducing emissions from deforestation and forest degradation), which may be included in a post-Kyoto agreement. One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases. There are two markets for carbon offsets.

approved by the UK government. For example, an individual might purchase carbon offsets to compensate for the greenhouse gas emissions caused by personal air travel.

Oilwatch.org s Michael Karikpo calls this outrageous as flaring is illegal in Nigeria, It s like a criminal demanding money to stop committing crimes . Although many carbon offset projects tout their environmental co-benefits, some are accused of having negative secondary effects. The Agip Oil Company plans to build plants to generate electricity from this gas and thus claim 1.5 million offset credits a year.

Point Carbon has reported on an inconsistent approach with regards to some hydro-electric projects as carbon offsets; some countries in the EU are not allowing large projects into the EU ETS, because of their environmental impacts, even though they have been individually approved by the UNFCCC and World Commission on Dams. Offset projects may also have negative social impacts, for example when local residents are evicted to enable a National Park to be marketed as a carbon offset. . The credibility of the various certification providers is often questioned.

There are a number of different types of LULUCF projects: Voluntary purchasers can offset their carbon emissions by purchasing carbon allowances from legally mandated cap-and-trade programs such as the Regional Greenhouse Gas Initiative or the European Emissions Trading Scheme. Critics point to the following issues with tree planting projects: Several certification standards exist, offering variations for measuring emissions baseline, reductions, additionality, and other key criteria.

While carbon offsets which fund renewable energy projects help lower the carbon intensity of energy supply, energy conservation projects seek to reduce the overall demand for energy. However, no single standard governs the industry, and some offset providers have been criticized on the grounds that carbon reduction claims are exaggerated or misleading.

For example, one Chinese company generated $500 million in carbon offsets by installing a $5 million incinerator to burn the HFCs produced by the manufacture of refrigerants. Other companies have explored and rejected treadle pumps as a viable carbon offsetting approach due to these concerns. Due to their indirect nature, many types of offset are difficult to verify.

In the larger, compliance market, companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of carbon dioxide they are allowed to emit. Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e) and may represent six primary categories of greenhouse gases.

To convert RECs into offsets, the clean energy must be translated into carbon reductions, typically by assuming that the clean energy is displacing an equivalent amount of conventionally produced electricity from the local grid. Many companies (see list Offsets are typically achieved through financial support of projects that reduce the emission of greenhouse gases in the short- or long-term.

Methane has a global warming potential (GWP) 23 times that of CO2; when combusted, each molecule of methane is converted to one molecule of CO2, thus reducing the global warming effect by 96%. Some possible co-benefits from a project which replaces wood burning stoves with ovens which use a less carbon-intensive fuel include: In a recent survey conducted by EcoSecurities, Conservation International, CCBA and ClimateBiz, of the 120 corporates survyed more than 77% rated community and environmental benefits as the prime motivator for purchasing carbon offsets. Carbon offset projects can also negatively affect quality of life.

The most common project type is renewable energy, such as wind farms, biomass energy, or hydroelectric dams. These project types include renewable energy, methane abatement, energy efficiency, reforestation and fuel switching. Renewable energy offsets commonly include wind power, solar power, hydroelectric power and biofuel.

European emission allowances for the 2008-2012 second phase were selling for between 21 and 24 Euros per metric ton of CO2 as of July 2007. The voluntary Chicago Climate Exchange also includes a carbon offset scheme that allows offset project developers to sell emissions reductions to CCX members who have voluntarily agreed to meet emissions reduction targets. The Western Climate Initiative, a regional greenhouse gas reduction initiative by states and provinces along the western rim of North America, includes an offset scheme. This is especially the case for offsets with a high profit margin.

Problems include: Because offsets provide a revenue stream for the reduction of some types of pollutants, they can in some cases provide incentives to pollute more, so that polluting entities can later get credit for reducing emissions from an artificially high baseline. Carbon offsets in this category fund projects of several types: Industrial pollutants such as hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) have a GWP many thousands of times greater than carbon dioxide by volume. Land use, land-use change and forestry (LULUCF) projects focus on natural carbon sinks such as forests and soil.

However, given that treadle pumps are best suited to pumping shallow water, while diesel pumps are usually used to pump water from deep boreholes, it is not clear that the treadle pumps are actually achieving real emissions reductions. Some of these offsets are used to reduce the cost differential between renewable and conventional energy production, increasing the commercial viability of a choice to use renewable energy sources. Renewable Energy Credits (RECs) are also sometimes treated as carbon offsets, although the concepts are distinct.

Likewise, the Regional Greenhouse Gas Initiative, a similar program in the northeastern U.S., includes an offset program. Deforestation can be avoided either by paying directly for forest preservation, or by using offset funds to provide substitutes for forest-based products.

A paper from the Overseas Development Institute offers some indicators to be used in assessing the potential developmental impacts of voluntary carbon offset schemes: In an effort to inform and safeguard business and household consumers purchasing Carbon Offsets, the UK Government has launched a scheme for regulating Carbon offset products. Others include energy efficiency projects, the destruction of industrial pollutants or agricultural byproducts, destruction of landfill methane, and forestry projects. Carbon offsetting has gained some appeal and momentum mainly among consumers in western countries who have become aware and concerned about the potentially negative environmental effects of energy-intensive lifestyles and economies.

A credit mechanism that uses offsets may be incorporated in proposed schemes such as the Australian Carbon Exchange. A UK offset provider set up a carbon offsetting scheme which set up a secondary market for treadle pumps in developing countries. Certified offsets may be purchased from commercial or non-profit organizations for US$1–30 per tonne of CO2, due to fluctuations of market price.

United States company Pan Ocean Oil Corporation has also applied for credits in exchange for processing its own waste gas in Nigeria. The standard will provide guidance on what constitutes a genuine, additional voluntary offset credit, set requirements for the verification and retirement of such credits, and provide principles for calculating the emissions of an organisation, product or service which could be offset. Some activists disagree with the principle of carbon offsets, likening them to papal indulgences, a way for the guilty to pay for absolution rather than changing their behavior.

Whereas a carbon offset represents a reduction in greenhouse gas emissions, a REC represents a quantity of energy produced from renewable sources. However, some critics object to carbon offsets, and question the benefits of certain types of offsets. Offsets are viewed as an important policy tool to maintain stable economies.

Methane can also be generated using an anaerobic digester. An example of a project using a anaerobic digester can be found in Chile where in December 2000, the largest pork production company in Chile, initiated a voluntary process to implement advanced waste management systems (anaerobic and aerobic digestion of hog manure), in order to reduce greenhouse gas (GHG) emissions. REDD credits provide carbon offsets for the protection of forests, and provide a possible mechanism to allow funding from developed nations to assist in the protection of native forests in developing nations. Almost half of the world s people burn wood (or fiber or dung) for their cooking and heating needs.

George Monbiot, an English environmentalist and writer, says that carbon offsets are an excuse for business as usual with regards to pollution., and claim that these alleged effects are the intended goal of carbon offsets. Some environmentalists have questioned the effectiveness of tree-planting projects for carbon offset purposes. One of the hidden dangers of climate change policy is unequal prices of carbon in the economy, which can cause economic collateral damage if production flows to regions or industries that have a lower price of carbon - unless carbon can be purchased from that area, which offsets effectively permit, equalizing the price.

Not only is this outcome environmentally undesirable, it undermines other offset projects by causing offset prices to collapse. In Nigeria oil companies flare off 40% of the natural gas found. The Scheme sets standards for best practice in offsetting.

Carbon offsets have several common features: The CDM identifies over 200 types of projects suitable for generating carbon offsets, which are grouped into broad categories. These standards include the Voluntary Carbon Standard, Green-e Climate, Chicago Climate Exchange and the CDM Gold Standard, the latter of which expands upon the requirements for the Clean Development Mechanism of the Kyoto Protocol. Accounting of offsets may address the following basic areas: While the primary goal of carbon offsets is to reduce global carbon emissions, many offset projects also claim to lead to improvements in the quality of life for a local population.

These additional improvements are termed co-benefits, and may be considered when evaluating and comparing carbon offset projects. Annual carbon dioxide emissions in developed countries range from 6 to 23 tons per capita. Accounting systems differ on precisely what constitutes a valid offset for voluntary reduction systems and for mandatory reduction systems.