Carbon credits: new models of sustainable development

To offset emissions with carbon credits to support the reduction of greenhouse gas emissions and to contribute concretely to the achievement of the Sustainable Development Goals (SDGs). The transition to a low carbon economy is made possible thanks to the use of carbon credits, but what is really a carbon credit? And why should companies use this tool as an integral part of their business strategy?
 
Carbon credit is a real financial unit that represents the removal of a ton of CO2 equivalent from the atmosphere. It represents the carbon that has been avoided, reduced or seized through a project and that can be purchased as a means to offset emissions.

The carbon credit mechanism was introduced for the first time with the approval of the Kyoto Protocol, and its entry into force in 2005, as a real financial mechanism able to offset the effects of those emissions that would not have been otherwise reduced, which made it possible to adopt ad hoc climate change mitigation strategies.
 
Carbon credits as a tool to promote new models of sustainable development play a key role also at the Paris Conference, where for the first time we talk about the priority role that companies can have in mitigating the effects of change climate.

Translate the costs of COemissions into economic value

Every year, since 2006, the Forest Trends' Ecosystem Marketplace publishes the "State of the Voluntary Carbon Markets", a report to collect information on voluntary market transactions and detailed information on price trends, the types of projects and standards used. The latest report found that in 2016, volunteer buyers paid about $ 191.3 million to offset 63.4 million tonnes of CO2, and that prices ranged from less than $ 0.50 / tCO2 to more than $ 50 / tCO2e.
 
Although the actions to combat climate change have drastically increased, the Ecosystem Marketplace Report confirms that the road to be taken for the establishment of a carbon neutral economy is still long: the demand for compensation has not satisfied the offer, as volumes transactions on voluntary markets fell by 24% between 2015 and 2016 and an estimated 56.2 million metric tons of CO2 remained unsold. 
 
Through the simple process of purchasing carbon credits, organizations direct finance to economies and ecosystems in great difficulty. This means that their funding is not only helping to mitigate climate change, but contributes to the concrete improvement of communities by ensuring an improvement in living conditions and bringing social, economic and environmental benefits on a global scale. Carbon credits are considered one of the cornerstones of the so-called "Climate Finance", ie all those funding, of both public and private origin, destined to the development of projects and programs for mitigation and adaptation to climate change, with the aim of encouraging transition to "Climate Neutrality" and towards sustainable development.
 
In the Annual Report published by Gold Standard we talk about the important partnership signed with the UNFCCC Secretariat to create practical tools that can help and guide organizations to contribute to the SDGs in a meaningful, measurable and credible way - and above all to get the right recognition for have done it. The "Gold Standard for the Global Goals" focuses on the development and provision of a set of tools to quantify and report on the objectives of sustainable development of climate actions, including adaptability and resilience.
 
One of Carbonsink's core business activities consists precisely in assisting and involving companies in sustainable development projects, integrating, thanks to the carbon credit mechanism, the mitigation of the effects of climate change in their business models. Funding for projects located in developing countries produces benefits that are not only relevant to the environment and natural resources of our planet, but directly involve the local communities of the countries involved.
Stimulating local economies, providing income, improving health, educating, combating inequality and / or sharing new technologies to promote sustainable future are just some of the benefits expected from high-quality carbon clearing projects aligned with development sustainable goals. This allows the implementation of initiatives capable of combining the mitigation of the effects of climate change with a real and measurable contribution to the achievement of the "Sustainable Developmet Goals" (SDGs) already defined by the United Nations agenda.
 
Companies wishing to undertake a process of "compensation" or "neutralization" of emissions should consider these aspects in their strategic decisions and then rely on industry experts to avoid purchasing certificates based solely on the cost criterion without going beyond the concept of Avoided CO2.
 
Carbon credits are a real economic incentive able to guarantee concrete and long-term benefits for companies, and they are certainly part of a wider corporate strategy to reduce emissions. A tangible economic benefit made possible by the sale of credits and an important reputational benefit as a company able to comply with the Climate Agreements (Kyoto Protocol and Paris Agreement) and concretely contribute to the achievement of the Sustainable Development Goals.
 
The carbon credit market to make this possible has undoubtedly need guidance, this international best practice was developed by the International Carbon Reduction & Offset Alliance (ICROA).
 
ICROA establishes first that the measurement of emissions must be performed in accordance with the most important international standards to ensure consistency and accuracy, as well as a recognized and internationally verifiable measurement method. Credits must also be real, measurable, and independently verified, and projects must demonstrate that their claims meet the criteria and are subject to rigorous testing by third parties prior to certification.
Carbon credits: new models of sustainable development