Beginners Guide to Carbon Credits

What are carbon credits?

Carbon credits are similar to certificates that represent a reduction of greenhouse gases in the atmosphere. Projects that prevent the generation of greenhouse gases or remove greenhouse gases from the atmosphere earn these credits, which can in turn then be "sold" to other businesses and individuals to "offset" the emissions they generate. One carbon credit is the equivalent to a saving of one tonne of carbon dioxide (CO2).

Where do carbon credits come from?

Carbon credits fund the environmental projects designed to reduce CO2 emmissions including :

• The removal of carbon dioxide from the atmosphere and the storage of it in a “sink” e.g. forestry;
• The reduction of carbon dioxide emissions by replacing fossil fuels with renewable energy sources e.g. wind and solar energy;
• The capture of greenhouse gases and alternative use or destruction of them e.g. methane capture at landfills;
• The reduction of emissions through energy efficiency, e.g., reduce the amount of fuel or electricity needed.

Where do mytreefrog.com carbon credits come from?

We are currently supporting a Platinum Carbon Credit Project in the Rondonia State of Brazil.

The project area covers 10,000 hectares of primary Brazilian Rainforest, and is to be undertaken in the REDD category and then upgraded to Carbco’s new Platinum Standard Voluntary Carbon Accreditation.

The area contains 4,300 hectares of land with a current mining license for the extraction of gold, which, together with infrastructure would destroy much more than the 4,300 hectares in question due to the ancillary slash and burn tendencies in the region leading to widespread deforestation.

In addition, gold extraction activity is associated with serious environmental contamination. With revenue from carbon credits, it will be possible to secure a far greater degree of protection for this tract of primary forest, and provide the environment and local communities with social benefits.

The project intends that the forest should remain as primary forest with zero harvesting of timber (other than the occasional removal of individual trees by forest dwelling tribal people using traditional methods for their essential needs) so as to protect the forest’s bio-diversity.

By generating revenue from this standing forest, the incentive for illegal deforestation, or collusion with industry for unsustainable harvesting in the area will be countered, and such revenue will empower the local community with sufficient resources to assist the project partners in protecting the forest against destruction.

The projects aim is both a reduction in the Net Carbon Dioxide emitted into the atmosphere, and a better bio-diverse environment for local people. The project will be managed for the benefit of both locals and the global community taking into account the above goals. In addition to tackling these concerns, local poverty will be addressed, and considerable funds placed in trust to allow opportunities for local personal development and health.

As an additional level of accreditation to demonstrate benefit to the community and bio-diversity, we will be seeking at least equivalent status to the Climate Community and Biodiversity (CCB) Gold Standard.

This is in keeping with the ethical standards of the organisation, and is in any case a prudent measure to obtain the best possible price for these Platinum Standard Voluntary Carbon Credits, thus increasing the potential benefit to the local populous.

By applying the Carbco Platinum Standard, the project will ensure significant benefit to local people and to the host nation, Brazil, and in so doing, alleviate the poverty which might otherwise cause locals to damage or destroy the forest that this project is designed to protect. Local participation in the planning, implementation, and protection of the project, and in the financial and other benefits achieved, is vital to the smooth progression and ultimate success of the project.

Who buys carbon credits?

There are two markets for carbon offsets. In the compliance market, companies, governments, or other entities buy carbon offsets in order to comply with regulations on the total amount of carbon dioxide they are allowed to emit.

In the voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources.

Those buying voluntary credits to offset their emissions are generally buying for Public Relations/branding and Corporate Social Responsibility reasons. The next most common reason for purchases in this market is as a “pre compliance buy” (those buying in anticipation of regulation).

Other buyers are purchasing offsets for branding and competitive advantage reasons and taking action on greenhouse gas emissions to address the threat of climate change. Some companies or individuals can reduce their emissions a little or a lot, and for others it can be extremely difficult, impossible or not economically viable to reduce their emissions. Purchasing credits earned from a verified emission reduction project can help to offset such emissions and in turn, the revenue earned from the sale of those credits helps to fund that emission reduction project.