It is possible to find carbon credits that offer a balance between cost and impact, but it’s crucial to ensure the credits meet high-quality standards.

Ever heard the phrase ‘you get, what you pay for’? Well this goes for carbon credits too. The higher the price, the higher the impact. As the voluntary carbon market has faced increased scrutiny over the past few years, integrity associations such as the ICVCM and VCMI have become increasingly aware of the need to set tighter guidelines, for what is deemed genuine and impactful. 

COP28 also saw integrity frameworks and carbon registries come together to collaborate and unify guidelines to improve market transparency. We are seeing market trends shift in a similar pattern, with a focus on companies purchasing higher priced and higher integrity credits. But what does this mean for smaller organizations and SMB’s who are looking to buy carbon credits? In this article we go back to basics with carbon credits and round up some of the best methods for choosing high quality carbon credits, with a smaller budget. 

What is a carbon credit and how does it work?

Carbon credits and carbon offsets are financial instruments that represent the reduction or removal of greenhouse gas emissions from the atmosphere. 

Carbon credits and offsets are created through various projects and activities aimed at reducing emissions. These projects can include renewable energy generation, energy efficiency improvements, reforestation, biodiversity conservation and methane capture from landfills for example. Each project undergoes a rigorous assessment process to ensure its legitimacy and the accuracy of emission reductions.

Learn more in our article – Everything you need to know about carbon credits. 

How much is 1 carbon credit worth?

A carbon credit typically represents one metric ton of CO2, While a carbon offset refers to a project or initiative that facilitates emissions avoidance equivalent to one metric ton of CO2.

Who generates carbon credits?

Carbon credits are generated through projects that facilitate emissions avoidance. These projects must follow established methodologies and undergo verification by accredited third-party organizations. Verification ensures that the emission statistics are real and verifiable.

Carbon credits are verified by independent third-party organizations that specialize in greenhouse gas accounting and verification. Examples of leading verification standards include the Verified Carbon Standard (VCS by Verra), Gold Standard, and American Carbon Registry (ACR), Puro.Earth 

Where does carbon credit money go?

The money from carbon credit transactions goes to the entities that own or operate the projects generating the credits. This could include renewable energy project developers, reforestation initiatives, or organizations implementing emission reduction projects. The revenue generated is often used to cover project costs, invest in further sustainable practices, and support the overall goals of the projects.

At ClimateTrade, we provide climate solutions for companies who want to take a step forward in their sustainability commitments. We built the world’s first climate marketplace with the largest project portfolio. We prioritize transparency and traceability by utilizing blockchain technology to ensure customers who buy carbon credits know exactly where their investment is going, and project developers can receive the necessary funds quickly and efficiently. 

What factors affect carbon pricing?

Various factors contribute to the dynamics of carbon pricing, shaping the value and trade of carbon credits. The market demand and supply for carbon credits plays a central role in determining pricing trends. Concerns about greenwashing have slowed the market at times, however this has also helped to improve 

The type of carbon reduction or removal project, its geographical location, and the specific credits it generates also contribute to the variability in carbon pricing. Moreover, the credibility and effectiveness of the verification process for carbon credits are crucial factors influencing their pricing. Finally, investor and market confidence in the overall efficacy of carbon credits and the carbon market as a whole further contribute to the fluctuation of carbon pricing.

Discover today’s carbon prices.

What are high integrity carbon credits?

High integrity carbon credits refer to credits that meet stringent standards, ensuring that the emission reductions or removals claimed by the project are accurate, additional, verifiable, and environmentally sound. These credits adhere to recognized certification standards, providing transparency and credibility in the carbon market.

Carbon markets are crucial for advancing global efforts to reduce emissions. To optimize their effectiveness, collaboration among stakeholders is essential.

In 2023, the voluntary carbon market and forest carbon credits faced intense scrutiny, with widespread criticism regarding climate benefits, respect for communities and land rights. Potential for misuse by companies seeking to sidestep the challenges of decarbonizing their operations have also been widely debated. However, despite the negativity around the VCM as an approach to tackling climate change, thankfully the market has stood firm in its conviction of the benefits as one solution to tackling climate change and funding the action required to reduce global emissions. In this article we’ll explain how we got to this point and what industry experts predict will be the future of voluntary carbon markets. 

What is the difference between regulated and voluntary carbon markets?

Mandatory carbon markets are established in accordance with national, regional, or international policies and regulations. In compliance-based carbon markets, government bodies or regulatory authorities define specific limits on the total greenhouse gas (GHG) emissions permissible for certain industries or businesses. Commonly referred to as emission trading schemes (ETSs), these systems encompass cap-and-trade schemes and baseline-and-credit schemes. Cap-and-trade mechanisms involve setting a cap on emissions and allowing entities to trade allowances, while baseline-and-credit schemes establish a baseline for emissions, rewarding those surpassing it with credits. These mandatory markets play a crucial role in enforcing emission reduction targets and promoting environmental responsibility on a regulatory level.

Voluntary carbon markets on the other hand are not driven by legal obligations but rather by the willingness to offset emissions or invest in nature for ethical reasons. This growing international market operates through a system facilitating the voluntary buying and selling of carbon credits, generated by carbon projects. These projects aim to either prevent emissions or remove carbon from the atmosphere. To manage the increasing number of carbon projects and their associated credits, various voluntary certification and accreditation bodies have been established, ensuring transparency and accountability in the voluntary carbon market.

Read more about the difference between mandatory and voluntary carbon markets. 

Biodiversity loss is the emerging climate change in the transport industry, but biodiversity credits could support the sector’s challenges.

We’re facing a Biodiversity crisis, so let’s get straight to the point. More than half of the global GDP, approximately €40 trillion, is intricately linked to nature. The economic and social costs of inaction in the face of biodiversity loss and ecosystem collapse are enormous. From 1997 to 2011, the world lost an estimated €3.5-18.5 trillion per year in ecosystem services, with an additional €5.5-10.5 trillion per year lost due to land degradation. Biodiversity loss poses a severe risk to EU and global food security, threatening food systems and nutrition. It is also intrinsically linked to and exacerbates climate change, resulting in reduced crop yields, diminished fish catches, increased economic losses from disasters, and the loss of potential new sources of medicine. 

In a recent biodiversity credits report by the World Economic Forum and McKinsey & Company, they highlighted the relevance of biodiversity credits as a viable option for harnessing investment for nature conservation: 

‘Biodiversity credits are emerging as a possible instrument to drive investment towards positive nature outcomes with the potential to scale up rapidly. Biodiversity credits are verifiable, quantifiable and tradable units of biodiversity restored or preserved over a specified period of time. While the current voluntary market is nascent, it could expand rapidly with the potential to reach $2 billion by 2030 and $69 billion by 2050, bringing large-scale positive impacts if high integrity is maintained. Together with other instruments, biodiversity credits could contribute towards the goals of the Global Biodiversity Framework (GBF), which acknowledges their potential to harness investment for nature. Credits could also play an important role in returning earth systems to within their planetary boundaries.’

New European Government legislation will support and accelerate the transition to low-carbon supply chains and transport. 

The Challenges of Supply Chain Visibility

In order to meet ambitious decarbonization targets, companies need to prioritize emissions management with the same operational significance as enhancing efficiency and cutting costs. As we all know, this is much easier said than done. From supply chain visibility and transparency across intricate supply networks, to the investment and commitment by all parties involved. Global sustainability challenges in the transport industry are significant which is why supply chain decarbonization has been slow to catch up with other, more environmentally friendly industries.

Upstream and Downstream Supply Chain

In a recent report by Bain and Company, they found that as of October 2023, more than 6,000 companies representing close to 50 different sectors had set or committed to setting Science Based Targets for emissions reduction. That’s up from fewer than 500 companies in 2018. The report also stated that while each company and industry faces its own unique decarbonization challenges and opportunities, more than 20% of companies are not on trackto reach their reduction targets for the Scope 1 emissions generated by assets they own and operate or the Scope 2 emissions generated by purchased electricity and fuel. More than a third may not meet their planned reduction of upstream Scope 3 supplier emissions. That’s why the introduction of several European legislation changes coming into force this year will be critical in facilitating a more environmentally responsible and resilient global network.

Climate conversations will continue to dominate as severe weather events increase and nature-based solutions are set to lead the way in carbon markets.

As COP28 wrapped up and climate discussions briefly took a pause, Christmas festivities and New Year celebrations allowed us a moment of reflection on the past year. But we weren’t given much opportunity to hope for a more positive 2024 and the reality of climate change brought us back down to a turbulent earth. Japan woke up to a catastrophic Earthquake on New Year’s Day with threats of a Tsunami to follow. A tornado in Manchester also caused severe damages to homes and businesses as storm Gerrit swept the UK. Those that thought intense weather events could be left behind in 2023 can think again. The effects of climate change will continue to dominate conversations in the office, on the school-run, at the supermarket checkout and well, everywhere really. To put a positive spin on it though, we are encouraged by the heightened environmental awareness and confident it will lead to the prioritization of climate action. Welcome to the year dedicated to addressing climate issues. Here are our top 10 predictions for climate and carbon markets in 2024. 

1. El Niño will peak and we’ll experience another record-breaking summer

2023 marked the beginning of the El Niño cycle, a natural occurrence that creates a warm water band in the Pacific Ocean, causing global temperatures to rise above normal. This cycle has pushed the world past the 1.5 degrees Celsius (2.7 degrees Fahrenheit) warming threshold for the first time in 2023. 

El Niño cycle typically peaks from December to April so just as we have seen already with Japan and the UK, the most severe impacts are expected in the first part of 2024. Thought last summer was a hot one? Scientists anticipate the upcoming summer to be the hottest on record, offering a preview of the conditions we might experience in the 2030s.

Research indicates that the events industry’s annual carbon footprint is responsible for over 10% of global CO2 emissions.

The global events industry has witnessed exponential growth in recent decades, contributing significantly to tourism, economic development, and collaborative efforts. While events play a crucial role in addressing climate change by encouraging collaboration for innovative solutions, they also pose a considerable threat to the environment. Just take COP28 for example, while the gathering of world leaders is necessary, this year’s conference was the biggest ever, attracting over 84,000 attendees.

Research indicates that the events industry’s annual carbon footprint is responsible for over 10% of global CO2 emissions, a figure equivalent to the entire yearly emissions of the United States.

As the trillion-dollar events industry continues to grow at a rapid pace, there is an urgent need for sustainable practices to mitigate its impact on climate change. Governments, companies, and even sporting federations are recognizing this challenge and are increasingly committing to carbon neutrality. Let’s explore some of the ways you can make a difference by organizing a carbon-neutral event.

Step 1: Identify and Quantify Emission Sources

To embark on the path to carbon neutrality, organizers must first identify the major contributors to their event’s carbon footprint. Travel, waste, food, accommodation, and venue are the primary areas where emissions occur.

Travel: Travel constitutes a significant portion, ranging from 70% to 90% of an event’s carbon emissions.

Attendees’ impact can vary from 200 kg to 1000 kg of CO2 per day, depending on the extent of travel.
Consider all forms of travel, including flights, taxis, buses, trains, etc.

Waste:
Conferences generate around 1.89 kg of waste per attendee per day.

While efforts to reduce plastic and adopt biodegradable materials are commendable, they often fall short of addressing the broader impact.

Food:
Food production contributes nearly 30% to global greenhouse gas emissions.

The type and source of food, especially meat-heavy diets, significantly impact the event’s carbon footprint.

Accommodation:
Multi-day events involve attendees staying overnight, contributing to the overall carbon footprint.

Larger and higher-rated hotels tend to have a higher carbon footprint.

Venue:
Energy consumption for powering the venue accounts for about 4% of the total event footprint.
ClimateTrade customers have access to a powerful events calculator giving them complete control and visibility over the variables influencing their event’s carbon footprint.

Built in accordance with the Greenhouse Gas Protocol, our calculator provides accurate measurements, enabling organizers to make informed decisions and take meaningful actions towards reducing environmental impact.

Step 2: Develop a Mitigation Plan

Once emission hotspots are identified, organizers can implement strategies to reduce their event’s carbon footprint.

Hybrid Model: Adopt a hybrid model to reduce the reliance on extensive travel. Hybrid events not only cut carbon emissions but also broaden the event’s reach.

Sustainable Practices:
Invite local guests to reduce travel. You can also encourage the use of eco-friendly transportation.
Source local and serve vegetarian food and opt for venues using renewable energy.

Step 3: Offset Unavoidable Emissions

For emissions that cannot be completely eliminated, offsetting through credible carbon offset projects becomes crucial. Our climate action Marketplace offers over 200 high-quality and verifiable carbon offsetting and biodiversity projects to cover those unavoidable emissions that occurred as a result of your event.

Carbon Offsetting:
Carbon offsetting events emissions that cannot be avoided provides a vital means to neutralize the environmental impact, offering a tangible and immediate contribution to global sustainability initiatives and showcasing a commitment to responsible event management.

Making Carbon Neutral Events with ClimateTrade’s Carbon Footprint Calculator

ClimateTrade offers a comprehensive event calculator, aligning with the Greenhouse Gas Protocol, to empower companies and individuals in the journey towards carbon-neutral events. Here’s how it works: 

Calculate Carbon Footprint:
Use ClimateTrade’s event calculator covering transportation, catering, and more.
Follow the Greenhouse Gas Protocol for accurate measurements.

Choose Sustainable Projects:
Select projects from ClimateTrade’s marketplace, including reforestation and biodiversity protection.
Support local communities and environmental initiatives.

Spread the Word:
Share carbon-neutral achievements with stakeholders and media.
Inspire others to embrace sustainability in their events.

Generate a Lasting Impact:
Support sustainable projects to ensure continuous reinvestment in environmental initiatives.
Foster positive change and contribute to a sustainable future.

By utilizing tools like ClimateTrade’s Event Calculator, companies and individuals can take informed actions to reduce their environmental impact and work towards achieving carbon-neutral events.

The events industry can play a transformative role in climate action by adopting sustainable practices, reducing emissions, and actively contributing to global initiatives. Through calculated steps, strategic partnerships, and the embrace of innovative tools, the events industry can navigate the path to a greener, more sustainable future.