Carbon Credits
Carbon Footprint Solutions

Understanding Carbon Credits: A Clear Guide to Reducing Your Carbon Footprint

Carbon Markets 101

Carbon markets are a mechanism that allows the trading of carbon credits and carbon offsets. These markets have emerged as a response to the increasing global emissions and the growing concern for the environment. The carbon market is a way to mitigate the environmental crisis while also creating new market opportunities.

International carbon trading markets have been around since the 1997 Kyoto Protocols. However, the renewed interest in carbon markets is relatively new, with the emergence of new regional markets that have prompted a surge of investment. In the United States, no national carbon market exists, and only one state – California – has a formal cap-and-trade program.

The advent of new mandatory emissions trading programs and growing consumer pressure have driven companies to turn to the voluntary market for carbon offsets. Changing public attitudes on climate change and carbon emissions have added a public policy incentive. Despite an ever-shifting background of state, federal, and international regulations, there’s more need than ever for companies and investors to understand carbon credits.

Carbon Credits and Carbon Offsets

Carbon credits and carbon offsets are two common terms used in carbon markets. Carbon credits are a permit that allows the holder to emit a certain amount of carbon dioxide or other greenhouse gases. Carbon offsets, on the other hand, are credits generated by a project that reduces, avoids, or sequesters greenhouse gas emissions.

How Carbon Credits and Offsets are Created

Carbon credits and offsets are created through various mechanisms, including renewable energy projects, energy efficiency projects, and afforestation and reforestation projects. The process of creating carbon credits and offsets involves rigorous verification and certification by third-party auditors to ensure that the project meets the required standards.

The Carbon Marketplace

The carbon marketplace is where buyers and sellers of carbon credits and offsets come together to trade. The marketplace can be divided into two types: voluntary and compliance. Voluntary markets allow companies and individuals to purchase carbon offsets voluntarily, while compliance markets are regulated and mandatory. The size of the carbon offset market is growing, with increasing demand from companies and individuals looking to offset their carbon emissions.

How to Produce Carbon Credits

Producing carbon credits involves identifying and implementing projects that reduce, avoid, or sequester greenhouse gas emissions. These projects must be verified and certified by third-party auditors to ensure they meet the required standards.

Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) is a concept that encourages companies to take responsibility for their impact on society and the environment. Many companies are turning to carbon credits and offsets as a way to demonstrate their commitment to CSR and reduce their carbon footprint.

Opportunity to Maximize Impact

Carbon markets provide an opportunity for companies and individuals to maximize their impact on the environment by investing in projects that reduce greenhouse gas emissions. This investment can help to accelerate the transition to a low-carbon economy.

New Revenue Streams

Carbon credits and offsets can also provide new revenue streams for companies and individuals. By investing in carbon reduction projects, companies can generate carbon credits that can be sold on the carbon market.

Do Carbon Offsets Actually Reduce Emissions?

There is some debate about the effectiveness of carbon offsets in reducing emissions. While carbon offsets can help to fund carbon reduction projects, some argue that they do not address the root cause of the problem and may even encourage continued emissions.

Can You Purchase Carbon Offsets as an Individual?

Yes, individuals can purchase carbon offsets to offset their carbon emissions. There are many online retailers that offer carbon offsets for sale.

Do I Need Carbon Offsets or Carbon Credits?

The decision to purchase carbon offsets or carbon credits depends on individual circumstances. Companies and individuals looking to reduce their carbon footprint may choose to purchase carbon offsets or invest in carbon reduction projects to generate carbon credits.

Why Should I Buy Carbon Credits?

Buying carbon credits can help to offset carbon emissions and support the transition to a low-carbon economy. It can also demonstrate a commitment to corporate social responsibility and provide new revenue streams for companies and individuals.

What is Blue Carbon?

Blue carbon refers to carbon that is stored in coastal and marine ecosystems such as mangroves, seagrasses, and salt marshes. These ecosystems are important carbon sinks and can play a significant role in mitigating climate change.

Second Order Effects of Blue Carbon Credits

Blue carbon credits can have second-order effects, such as supporting the conservation of coastal and marine ecosystems and providing livelihoods for local communities. This can help to promote sustainable development and provide additional benefits beyond carbon sequestration.

1. Carbon Credits, Offsets and Markets – An Introduction

The Kyoto Protocol and the Paris Agreement set international CO2 emissions goals, leading to national emissions targets and regulations. As a result, businesses are under increasing pressure to reduce their carbon footprint. Carbon markets offer an interim solution by turning CO2 emissions into a commodity with a price.

Carbon credits and carbon offsets are the two types of emissions that can be bought and sold on a carbon market. Carbon credits are earned by companies that emit less than their allocated amount of CO2, while carbon offsets allow companies to compensate for their emissions by investing in projects that reduce emissions elsewhere.

The carbon market provides a market-based solution to the problem of reducing CO2 emissions. The market is regulated by various bodies, including the United Nations, and is expected to play a significant role in achieving the goals of the Paris Agreement and COP26 in mitigating climate change and global warming.

2. What are Carbon Credits and Carbon Offsets?

Carbon credits and carbon offsets are two different mechanisms for reducing carbon dioxide emissions. Carbon credits, also known as carbon allowances, are permission slips for emissions. When a company buys a carbon credit, they gain permission to generate one ton of CO2 emissions. The revenue from carbon credits flows vertically from companies to regulators, although companies with excess credits can sell them to other companies.

On the other hand, offsets trade carbon revenue horizontally between companies. When a company removes a unit of carbon from the atmosphere as part of their normal business activity, they can generate a carbon offset. Other companies can then purchase that carbon offset to reduce their own carbon footprint.

It is important to note that the terms carbon credits and carbon offsets are sometimes used interchangeably, and carbon offsets are often referred to as “offset credits”. However, the distinction between regulatory compliance credits and voluntary offsets should be kept in mind.

3. How Carbon Credits and Offsets are Created?

Carbon credits and offsets are created to help reduce greenhouse gas emissions and combat climate change. Both are measured in terms of carbon dioxide equivalent (CO2e), which is the standard unit of measurement for greenhouse gas emissions.

Carbon Credits

Carbon credits are issued by national or international governmental organizations, as well as private companies. In the United States, California operates its own carbon market and issues credits to residents for gas and electricity consumption. The number of credits issued each year is typically based on emissions targets, and credits are frequently issued under what’s known as a “cap-and-trade” program. Regulators set a limit on carbon emissions – the cap – and that cap slowly decreases over time, making it harder and harder for businesses to stay within that cap.

Companies that emit less than their cap are able to sell their excess credits to companies that emit more than their cap. This incentivizes companies to reduce their emissions and helps to create a market for carbon credits. In essence, a carbon credit is a “permission slip” for a company to emit up to a certain set amount of CO2e that year.

Around the world, cap-and-trade programs exist in some form in Canada, the EU, the UK, China, New Zealand, Japan, and South Korea, with many more countries and states considering implementation.

Carbon Offsets

Carbon offsets work slightly differently than carbon credits. Organizations with operations that reduce the amount of carbon already in the atmosphere, such as planting more trees or investing in renewable energy, have the ability to issue carbon offsets. The purchase of these offsets is voluntary, which is why carbon offsets form what’s known as the “Voluntary Carbon Market”. However, by buying these carbon offsets, companies can measurably decrease the amount of CO2e they emit even further.

Carbon offsets are created through various programs, such as reforestation, afforestation, and avoided deforestation. These programs help to reduce greenhouse gas emissions by removing carbon dioxide from the atmosphere or preventing it from being released in the first place.

Forests play a critical role in the creation of carbon offsets, as they absorb carbon dioxide from the atmosphere as they grow. By protecting and restoring forests, carbon offsets can be created that help to reduce greenhouse gas emissions and combat climate change.

Overall, carbon credits and offsets are important tools in the fight against climate change. By incentivizing companies to reduce their emissions and supporting programs that remove carbon dioxide from the atmosphere, these tools can help to create a more sustainable future for all.

4. What is the Carbon Marketplace?

The carbon marketplace is a platform where carbon credits are bought and sold. Carbon credits are a form of currency that represents the right to emit one tonne of carbon dioxide equivalent (CO2e) into the atmosphere. The marketplace allows buyers and sellers to participate in two different markets: the regulated market and the voluntary market.

The Difference between the Voluntary and Compliance Markets

The regulated market is a compliance market that is mandated by “cap-and-trade” regulations at the regional and state levels. Under this system, each company operating under a cap-and-trade program is issued a certain number of carbon credits each year. Companies that produce less emissions than the number of credits they’re allotted have a surplus of carbon credits. On the other hand, companies that produce more emissions than the number of credits they receive each year can cover must purchase carbon credits to offset their emissions.

For example, if two companies, Company 1 and Company 2, are only allowed to emit 300 tons of carbon, but Company 1 is on track to emit 400 tons of carbon this year, while Company 2 will only be emitting 200 tons, Company 1 can make up for emitting 100 extra tons of CO2e by purchasing credits from Company 2, who has extra emissions room to spare due to producing 100 tons less carbon this year than they were allowed to. This helps Company 1 stay under the cap and avoid a penalty comprised of fines and extra taxes.

The voluntary market, on the other hand, is optional, and companies and individuals buy credits to offset their carbon emissions of their own accord. Companies in this marketplace have the opportunity to work with businesses and individuals who are environmentally conscious and are choosing to offset their carbon emissions because they want to. There is nothing mandated here.

For example, in 2021, the oil giant Shell announced the company aims to offset 120 million tonnes of emissions by 2030. Regardless of their reasoning, companies are looking for ways to participate – and the voluntary carbon market is a way for them to do just that.

Both the regulatory and voluntary marketplaces complement one another in the professional (and the personal) world. They also make the pool of buyers more accessible to farmers, ranchers, and landowners – those whose operations can often generate carbon offsets for sale.

4.1 Top Carbon Companies (Stocks, ETFs)

This section highlights the top 4 carbon companies to watch in 2023. These companies are recognized for their world-class assets and management teams. Investors looking to invest in carbon stocks or ETFs should consider these companies. Check out the Stocks Watchlist page for more curated companies to watch.

Company Ticker Market Cap
Company A XYZ $10B
Company B ABC $8B
Company C DEF $5B
Company D GHI $3B

Note: Market cap is as of December 13, 2023.

5. Overall size of carbon offset markets

Measuring the size of the voluntary carbon market can be challenging due to the varying costs of carbon credits and disparities between different types of carbon offsets. However, analysts predict that the sector’s value will range between $10-25 billion by 2030, depending on how aggressively countries pursue their climate change targets. In 2022, the voluntary carbon market was estimated to be worth about $400 million.

Despite the difficulties in measuring the market’s size, it is clear that participation in the voluntary carbon market is growing rapidly. Third-party validators play a crucial role in ensuring that each carbon offset results from real-world emissions reductions, adding a level of control to the process. However, even with the projected growth, the voluntary carbon market would still fall significantly short of the investment required for the world to meet the targets set out by the Paris Agreement.

Investors can participate in the voluntary carbon market through purchasing carbon credits or investing in companies that offer carbon offsets. As the market continues to grow, more investment opportunities may arise for those interested in supporting emissions reductions and mitigating climate change.

6. How to Produce Carbon Credits

Carbon credits can be produced by various businesses and organizations through different methods, including renewable energy projects, energy efficiency improvements, carbon and methane capture, and land use and reforestation projects. Each of these methods has its own unique benefits and challenges.

Renewable Energy Projects

Renewable energy projects involve using natural resources like wind, solar, and hydro power to generate electricity. These projects have been popular for many years due to their low cost and environmental benefits. In addition to providing clean energy, renewable energy projects can also create carbon credits. For instance, a wind farm can generate carbon credits by displacing the need for fossil fuel-based electricity generation.

Energy Efficiency Improvements

Energy efficiency improvements involve reducing the energy demands of buildings and infrastructure. This can be achieved through simple changes like switching to LED lights or more substantial changes like renovating buildings or optimizing industrial processes. Energy efficiency improvements can also create carbon credits by reducing energy consumption and associated emissions.

Carbon and Methane Capture

Carbon and methane capture involves removing CO2 and methane from the atmosphere. Methane can be burned off to create CO2, which reduces net emissions by over 95%. Carbon can be captured directly at the source, such as from chemical or power plants. The captured carbon can be stored underground, which is a newer concept that treats it like nuclear waste. Carbon and methane capture can create carbon credits by reducing emissions.

Land Use and Reforestation Projects

Land use and reforestation projects use trees and soil to absorb carbon from the atmosphere. This includes protecting and restoring old forests, creating new forests, and soil management. Plants convert CO2 into organic matter through photosynthesis, which eventually ends up in the ground as dead plant matter. The CO2 enriched soil helps restore the soil’s natural qualities, enhancing crop production while reducing pollution. Land use and reforestation projects can create carbon credits by sequestering carbon in trees and soil.

Overall, there are various ways to produce carbon credits, and each method has its own unique benefits and challenges. Businesses and organizations can choose the most suitable method based on their resources and goals. By producing carbon credits, they can help reduce the impact of climate change and contribute to a more sustainable future.

6.1 Who Validates Carbon Credits?

Carbon credits are verified by third-party organizations known as certification bodies. These entities are responsible for ensuring that carbon credits meet the standards set by various protocols, including the Verified Carbon Standard (VCS) and the Verra Standard.

The California Air Resources Board (CARB) is another entity that validates carbon credits. CARB is responsible for implementing California’s cap-and-trade program, which requires companies to purchase carbon credits to offset their greenhouse gas emissions.

In order to be validated, carbon credits must meet specific criteria outlined in the relevant protocols. These criteria may include the type of project that generates the credits, the methodology used to calculate the emissions reductions, and the monitoring and reporting requirements.

Once a project has been validated, it is issued a unique serial number that can be tracked throughout the carbon credit market. This serial number is used to ensure that the credits are not double-counted or sold more than once.

Overall, the validation process is crucial to ensuring the integrity of the carbon credit market. By verifying that carbon credits meet specific standards, certification bodies and other entities help to promote transparency and accountability in the fight against climate change.

7. How Companies Can Offset Carbon Emissions

Companies have a wide range of options to offset their carbon emissions. Some popular practices include investing in renewable energy, improving energy efficiency, capturing carbon, returning biomass to the soil, promoting forest regrowth, and switching to alternate fuel types.

One way companies can offset their carbon emissions is by investing in renewable energy. This can be done by funding wind, hydro, geothermal, and solar power generation projects or switching to such power sources wherever possible. By doing so, companies can reduce their dependence on fossil fuels and lower their carbon footprint.

Another way is by improving energy efficiency across the world. For instance, companies can provide more efficient cookstoves to those living in rural or more impoverished regions. This can help reduce the amount of fuel needed to cook food and, in turn, lower carbon emissions.

Companies can also capture carbon from the atmosphere and use it to create biofuel, which makes it a carbon-neutral fuel source. This process involves removing carbon dioxide from the atmosphere and converting it into a fuel source that can be used to power vehicles or generate electricity.

Returning biomass to the soil as mulch after harvest instead of removing or burning is another way companies can offset their carbon emissions. This practice reduces evaporation from the soil surface, which helps to preserve water. The biomass also helps feed soil microbes and earthworms, allowing nutrients to cycle and strengthen soil structure.

Promoting forest regrowth through tree-planting and reforestation projects is also an effective way to offset carbon emissions. Trees absorb carbon dioxide from the atmosphere and store it in their biomass, helping to reduce the amount of carbon in the atmosphere.

Finally, companies can switch to alternate fuel types, such as lower-carbon biofuels like corn and biomass-derived ethanol and biodiesel. By doing so, they can reduce their dependence on fossil fuels and lower their carbon footprint.

It is important to note that when it comes to regulated and voluntary markets, there are third-party auditors who verify, collect, and analyze data to confirm the validity of each offset project. However, companies should be careful when shopping online or directly from other businesses, as not all offset projects are certified by appropriate third parties, and those that aren’t generally tend to be of dubious quality.

Overall, companies have a range of options to offset their carbon emissions, and by implementing these practices, they can help reduce their impact on the environment.

8. Voluntary vs Compulsory: The Biggest Difference Between Credits and Offsets

One of the biggest differences between carbon credits and offsets is that participation in a cap-and-trade program is typically compulsory, while purchasing offsets is a voluntary market. Companies must abide by carbon credit limits set by regulators or face penalties. In contrast, there’s no regulation that mandates companies to purchase carbon offsets.

Companies that participate in a cap-and-trade system have a clear framework for reducing carbon emissions. However, carbon credits and allowances are not created equal, and some cap-and-trade programs may not have a significant impact on total carbon emissions.

On the other hand, offsets provide a few advantages that credits simply don’t. Offsets allow companies to go above and beyond by voluntarily reducing their carbon footprint. This can be particularly advantageous for companies operating in regions where cap-and-trade programs don’t exist yet.

Overall, while participation in a cap-and-trade program may be compulsory, purchasing offsets provides companies with the opportunity to take additional voluntary action to reduce their carbon footprint.

9. The Two Types of Global Carbon Markets: Voluntary and Compliance

Global Compliance Market

The global compliance market for carbon credits is a massive market that is dominated by mandatory schemes that limit greenhouse gas emissions. This market is highly fragmented, with different regions and countries adopting their own regulations and trading schemes. For example, the European Union has the Emissions Trading System (ETS), while California has its own cap-and-trade program. In 2020, the total market size for compliance markets was US$261 billion, with 10.3Gt CO2 equivalent traded, according to Refinitiv.

Companies with low emissions can sell their extra allowances to larger emitters in a compliance market. This enables companies to offset their emissions and meet their emissions targets. The compliance market is highly regulated, with strict rules and procedures in place to ensure that carbon credits are genuine and meet the required standards.

The Voluntary Carbon Market

The voluntary carbon market for offsets is smaller than the compliance market, but it is expected to grow significantly in the coming years. This market is open to individuals, companies, and other organizations that want to reduce or eliminate their carbon footprint, but are not necessarily required to do so by law. Consumers can purchase offsets for emissions from a specific high-emission activity, such as a long flight, or buy offsets on a regular basis to eliminate their ongoing carbon footprint.

The voluntary carbon market is where many companies, such as Apple, Stripe, Shell, and British Petroleum, are actively seeking to offset their footprint. This market is less regulated than the compliance market, with fewer rules and procedures in place. However, it is important to note that there are still standards and guidelines that need to be followed to ensure the integrity of carbon offsets.

In summary, the global carbon market can be divided into two main types: the compliance market and the voluntary market. Both markets play an important role in reducing greenhouse gas emissions and addressing climate change. The compliance market is dominated by mandatory schemes, while the voluntary market is open to anyone who wants to reduce their carbon footprint.

10. Corporate Social Responsibility (CSR)

As consumers become increasingly aware of the impact of carbon emissions, companies are under pressure to take climate change seriously. By investing in carbon offset projects, companies like Microsoft can signal to consumers and investors that they are committed to combatting climate change. The benefits of CSR can often outweigh the actual cost of the offset, making it a smart business decision for companies to pursue a net-zero emissions goal.

11. Opportunity to Maximize Impact

Carbon offsets provide an opportunity for companies to maximize their impact in reducing their carbon footprint. While carbon allowances in regulated markets may not always be worth their stated value, carbon offsets allow companies to address both future and historical emissions of CO2e. Companies can choose the types of projects that provide the greatest impact, such as Blue Carbon projects, which can have a significant effect on reducing carbon emissions.

Using carbon offsets correctly can earn companies extra PR credit and achieve a more measurable reduction in carbon emissions. Although there is no regulatory body overseeing carbon offsets, standards companies like Verra have become influential in vetting the carbon offsets market. This ensures that companies are purchasing legitimate offsets that have a real impact on reducing carbon emissions.

However, companies need to be cautious of greenwashing, which is the practice of making exaggerated or false claims about a company’s environmental impact. By carefully selecting legitimate carbon offset projects and avoiding greenwashing, companies can effectively reduce their carbon footprint and demonstrate their commitment to sustainability.

12. The Offset Advantage: New Revenue Streams

Carbon offsets can offer a significant revenue stream for companies that sell them. Tesla, for example, sold carbon credits worth $518 million to legacy car manufacturers in just the first quarter of 2021. This revenue stream has been instrumental in keeping Tesla profitable. As the market for carbon credits continues to grow, and the pricing of credits increases, businesses that prioritize the environment could benefit greatly. This potential for new revenue streams could incentivize more companies to invest in environmentally friendly practices and offset their carbon emissions.

13. Do carbon offsets actually reduce emissions?

Carbon offsets are a way for companies to compensate for their greenhouse gas emissions by investing in projects that reduce emissions elsewhere. The question is, do these offsets actually lead to a reduction in emissions?

The answer is not straightforward. While some offset programs have a clear link between the activity and the environmental impact, others are more difficult to measure. The reputation of the organization issuing the credit determines the value of the offset.

However, reputable carbon offset organizations choose carbon projects carefully and report on them meticulously. Third-party auditors can help ensure such projects measure up to strict standards like those established by UN’s Clean Development Mechanism.

Once properly vetted, “high-quality” offsets represent tangible, measurable amounts of reductions in CO2e emissions that companies can use like they reduced their own greenhouse gas emissions themselves. Though the company has not yet actually reduced their own emissions, the world is just as well off as if the company had actually done so.

Carbon offsets can be an effective tool for reducing greenhouse gas emissions. However, they should not be seen as a substitute for reducing emissions at the source. Companies should prioritize reducing their own emissions before relying on offsets to compensate for their remaining emissions.

In conclusion, carbon offsets can lead to a reduction in emissions if they are properly vetted and the projects they support are carefully chosen and monitored. However, they should not be seen as a replacement for reducing emissions at the source.

14. Can you purchase carbon offsets as an individual?

Carbon Footprint Calculator

Individuals can purchase carbon offsets from third-party companies that function as intermediaries. These companies offer a few advantages, including acting as a verification mechanism to ensure that the carbon offsets purchased are actually offsetting carbon.

For instance, Galaxus, Switzerland’s leading online retailer, offers consumers the ability to offset the carbon footprint of their purchase. Many organizations also provide a carbon footprint calculator that individuals can use to determine the number of carbon offsets needed to achieve carbon neutrality.

Purchasing carbon offsets is a way for individuals to minimize their carbon footprint and live an environmentally friendly lifestyle. The growing demand for carbon offsets indicates that there is potential for companies that produce carbon credits to see significant growth in the market in the coming decades.

15. Do I Need Carbon Offsets or Carbon Credits?

So which do you need?

To reduce emissions, companies have to reconfigure their operations and account for the emissions they cannot eliminate by purchasing carbon credits. On the other hand, ambitious organizations, corporations, and individuals can purchase carbon offsets to reach net zero or nullify all previous historical emissions.

If you’re a corporation, you might need both carbon offsets and credits depending on your business goals and local regulations. However, if you’re a consumer, carbon credits might not be available to you, but you can still contribute to reducing emissions by purchasing carbon offsets.

The global goal is to stop dumping chemicals into the metaphorical water supply and purify the existing water supply over time. This means drastically reducing CO2 emissions and removing the CO2 currently in the atmosphere to materially reduce pollution.

In conclusion, the choice between carbon offsets and credits depends on your goals and circumstances. Companies should consider both options to reduce their emissions, while individuals can still make a difference by purchasing carbon offsets. It’s important to work towards reducing emissions and removing existing CO2 to combat climate change.

16. Why Invest in Carbon Credits?

Carbon credits are a way to offset carbon emissions by investing in projects that reduce greenhouse gases. For individuals, buying carbon credits can be a way to reduce their carbon footprint and contribute to the fight against climate change. For corporations, investing in carbon credits can help them meet their sustainability goals and demonstrate their commitment to the environment.

If you are an environmentally conscious individual, buying carbon credits from a reputable vendor is an effective way to offset your carbon footprint. By investing in projects like renewable energy or reforestation, you can help reduce greenhouse gas emissions and support sustainable development.

On the other hand, if you are interested in carbon credits as an investment opportunity, the global carbon market is growing at a rapid pace. As climate change becomes an increasingly relevant concern, the demand for carbon credits is expected to rise. Investing in carbon credits can be a way to diversify your portfolio and potentially earn a return on your investment.

To explore the best investment opportunities in the carbon sector, head over to a carbon investor centre like Native Energy. By investing in carbon credits, you can help combat climate change while also potentially earning a return on your investment.

17. What is Blue Carbon?

Blue Carbon refers to carbon credits derived from blue carbon ecosystems, which are primarily marine forests such as tidal marshes, mangrove forests, and seagrass beds. Mangroves, for example, are trees that have evolved to survive in flooded coastal environments where seawater meets freshwater, and they cover just 0.1% of the earth’s surface.

Despite their small size, blue carbon ecosystems are among the most intensive carbon sinks in the world, and pound for pound, mangroves can store up to four times more carbon than terrestrial forests. This makes blue carbon offsets highly valuable in the fight against climate change.

In addition to their carbon storage capabilities, blue carbon ecosystems provide shelter and food for numerous species, including sharks, whales, and sea turtles. They also have positive impacts on corals, algae, and marine biodiversity, which have been negatively impacted by activities such as over-fishing and farming.

Blue carbon offsets can remove enormous amounts of greenhouse gases relative to the amount of area they occupy, and a blue carbon offset project will have its carbon offsets trade at a premium. These offsets provide a whole slew of other side benefits to their local ecosystems, making them a valuable tool in the fight against climate change.

18. Second Order Effects of Blue Carbon Credits

Blue Carbon and the Food Footprint

Blue carbon credits have significant positive second-order effects, making them more valuable than other carbon credits. These credits are associated with aquatic forests and wetlands that sequester and store carbon for more than ten times longer than tropical forests. Mangrove forests, which are a type of blue carbon system, provide a range of additional benefits, including acting as a pollution filter, reducing coastal wave energy, and reducing the impacts of coastal storms and extreme events.

The accumulation of sediment in blue carbon systems supports root systems for more plants, enabling coastal habitats to keep pace with rising sea levels. However, the destruction of mangrove forests for shrimp farming has resulted in a land-use carbon footprint of 1,603 kg CO2e for every kilogram of shrimp produced. The carbon footprint of a typical steak and shrimp cocktail dinner from such sources is 816 kg CO2e.

Over 1 billion tons of carbon dioxide are released annually from degrading coastal ecosystems, which is why blue carbon credits are becoming increasingly important. There are around 14 million hectares of mangrove aquaforests on Earth today, and many are under attack by deforestation practices caused by shrimp farming. Consumers will soon be required to cover the offset costs for the environmental damage caused by such practices.

Restoring blue carbon regions provides enormous biodiversity benefits to both marine and terrestrial species, improving the livelihoods and cultural practices of local and traditional communities. To put things into perspective, 14 million acres of wetlands would absorb as much carbon out of the atmosphere as if all of California and New York State were covered in tropical rainforest. Blue carbon can be thought of as the “high grade” gold mine at the surface.

Oceanic Blue Carbon

In addition to coastal blue carbon, oceanic blue carbon is stored deep in the ocean within phytoplankton and other open ocean biota. The capture of carbon by blue carbon ecosystems is influenced by factors such as location, depth of water, plant species, and supply of nutrients. Improving blue carbon ecosystems can significantly improve the livelihoods and cultural practices of local and traditional communities.

+ posts

I'm a writer for lifestyle publications, and when I'm not crafting stories, you'll find me cherishing moments with my family, including my lovely daughter. My heart also belongs to my pets—Sushi, Snowy, Belle, and Pepper. Besides writing, I enjoy watching movies and exploring new places through travel.

I'm a writer for lifestyle publications, and when I'm not crafting stories, you'll find me cherishing moments with my family, including my lovely daughter. My heart also belongs to my pets—Sushi, Snowy, Belle, and Pepper. Besides writing, I enjoy watching movies and exploring new places through travel.

Leave a Reply

Your email address will not be published. Required fields are marked *