Trading Carbon Offsets for a Brighter Planet

Once governments realised the need to reduce carbon emissions they then had to face the fact that in many industries, organisations would simply be unable to reduce their emissions sufficiently without suffering a massive impact on their efficiency or profitability. The consequent impact on the economy would be unacceptable. A means was needed to create a transition from the current state of industry where carbon emissions were unregulated and unacceptably high to a future state where carbon emissions are controlled and within acceptable limits.

Various concepts and workarounds have come about because of the inability of industry to quickly reduce its carbon footprint to within acceptable limits. Recognising the potential impact on the economy of forcing businesses to conform to carbon footprint regulation, a trading vehicle was established in the form of carbon offsets to enable organisations to increase the amount of carbon dioxide or equivalent they are permitted to emit. Organisations that cannot meet the levels of carbon emissions deemed acceptable for their size can buy carbon offsets to make up the difference.

One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases. The money spent on carbon offsets is invested in renewable energy programmes. The challenge with such a marketplace is to make the cost to organisations buying carbon offsets enough to sustain a renewable energy programme that could make products and services available to enable those organisations to reduce their carbon footprint in the future. The carbon trading market is a transitional vehicle permitting organisations to contribute to a common fund to target greener and renewable energy, ultimately removing the need for the market at some point in the future.

There are two markets in which carbon offsets can be traded, the compliance market described above, and the voluntary market. The voluntary market enables anyone to offset their personal carbon footprint or the carbon footprint of others by making a donation. For example, many airlines permit customers to tick a box to donate an additional amount equivalent to the carbon footprint generated by their flight. Other organisations, like Brighter Planet, provide various tools to manage your footprint including a tool for calculating your personal footprint and credit cards that result in a contribution towards renewable energy projects with each purchase. Their website includes a long list of personal actions you can take to reduce your carbon footprint. The same organisation runs a scheme whereby if you raise awareness in this area, they will donate to the carbon offset fund on your behalf.

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