Companies cannot eliminate carbon emissions overnight and developing the technology takes time. Unfortunately, with climate change, time is not on their side.
While there is still a lot of work that needs to be done, companies can reduce carbon emissions right now through carbon offsets.
Here’s how it works:
Companies purchase carbon credits through a carbon marketplace and each credit equals one metric ton of carbon, or greenhouse gas (GHG). One ton of carbon or GHG is then removed from the atmosphere through reforestation, improved forest management, and green energy.
Consider it a trade. A company puts one ton of carbon into the atmosphere. Then, they remove it through something positive, such as planting a forest.
If you were wondering just how lucrative carbon offsetting is, the industry is projected to hit $100B by 2030 – up from $300M in 2018. So, opportunities within the carbon offset industry are endless.
Credits are certified by independent agencies where it’s the agency’s job to verify and manage the standards, projects, and transactions that take place. There are currently four major Green House Gas (GHG) crediting programs that certify projects:
- Verra’s Verified Carbon Standard,
- Climate Action Reserve,
- Gold Standard, and
- American Carbon Registry.
Let’s look at Verra’s Verified Carbon Standard (VCS)
Verra’s program boasts 1,700+ certified green projects that have removed more than 714 million metric tons of carbon from the atmosphere. They require registered projects to upload descriptions, auditing reports, and the status of all credits issued and retired.
All relevant information is easy to use and understand and CME Group – one of the world’s leading derivatives marketplaces – agrees.
On August 1st, CME Group created their N-GEO™ futures contract where its goal goes beyond just reducing carbon emissions. Their focus is to support biodiversity and conservation efforts within local communities.
They plan to do that by using Verra’s Verified Carbon Standard (VCS) to measure offsets – a big deal for Verra and the carbon offset industry.
Though each crediting program has excellent incentives, Verra’s Carbon Standard is one to watch.