Carbon Credits and Carbon Footprints

CARBON CREDITS

  • A carbon credit is a permit allowing a country or organization to produce a specific amount of carbon emissions. If the full allowance isn't used, the remaining credits can be traded.

CARBON FOOTPRINTS

  • A carbon footprint is the total greenhouse gas (GHG) emissions caused by an organization, event, or product.
  • For simplicity, it's often expressed as the equivalent amount of carbon dioxide (CO2) emitted.
  • It measures the impact of activities on the environment, particularly climate change.
  • This impact is related to the greenhouse gases produced through burning fossil fuels for electricity, heating, transportation, etc.
  • Calculating the exact total carbon footprint is virtually impossible due to the massive amount of data required.
  • Wright, Kemp, and Williams define it as:
    • "A measure of the total amount of carbon dioxide (CO2) and methane (CH4) emissions of a defined population, system, or activity, considering all relevant sources, sinks, and storage within the spatial and temporal boundary of the population, system or activity of interest."
  • It's calculated as carbon dioxide equivalent (CO_2e) using the relevant 100-year global warming potential (GWP100).

REDUCING CARBON FOOTPRINTS

  • Once the size of a carbon footprint is known, strategies can be devised to reduce it through:
    • Technological developments
    • Better process and product management
    • Changed Green Public or Private Procurement (GPP)
    • Carbon capture
    • Consumption strategies
  • Mitigation of carbon footprints can also be achieved through alternative projects like solar or wind energy or reforestation; this is known as carbon offsetting.

CARBON FOOTPRINT DETAILS

  • The total amount of \text{CO}_2 and other greenhouse gas (GHG) emissions for which an individual or organization is responsible is their carbon footprint.
  • Usually expressed in equivalent tons of carbon dioxide (CO_2).
  • Calculated for events or products as well.
  • An organization's footprint includes:
    • Direct emissions sources (e.g., direct use of fuels)
    • Indirect impacts (e.g., from the extended supply chain)
  • When calculating an organization's footprint, it's important to include the full range of emissions.

CALCULATING A CARBON FOOTPRINT

  • A basic approach to carbon footprinting involves a fairly quick calculation.
  • Many simple calculators are available online.
  • These typically cover direct emissions but exclude some of the indirect emissions.
  • There are usually a handful of major emission sources that must be quantified, including:
    • Onsite fuel usage
    • Onsite electricity usage
    • Use of transport which you own

KEY INFORMATION FOR CALCULATION

  • Collect data from all utility meters.
  • Record the distances traveled by the organization's vehicles.
  • Convert the fuel, electricity, and transport consumption figures to \text{CO}_2 by using standard emissions factors.
  • Once established, steps to manage emissions include:
    • Setting and agreeing on efficiency or emissions reduction targets.
    • Identifying likely opportunities for efficiency or emissions reduction.
    • Prioritizing the opportunities, based on environmental or financial criteria.
    • Taking action to implement the opportunities.
    • Monitoring the performance of the actions taken and improving as necessary.

PRODUCING A FULL CARBON FOOTPRINT

  • Accurate calculation requires:
    • More detailed approach
    • Specialist advice
  • The steps below show a systematic approach for producing an accurate carbon footprint:
    1. Methodology
    2. Boundary and scope of coverage
    3. Collect emissions data and calculate the footprint
    4. Verify results (optional)
    5. Disclose the footprint (optional)

METHODOLOGY

  • The methodology of a company must be clearly defined.
  • For a footprint to be repeatable and accurate, there must be consistency.
  • This is especially important in a large industry where many individuals help collectively.
  • Commonly used methodologies include:
    1. GHG Protocol, which provides detailed guidance on corporate emissions reporting.
    2. International Organization for Standardization, ISO 140645, also provides guidance on corporate footprint calculation and emissions reporting.

BOUNDARY AND SCOPE OF COVERAGE

  • The parts of the organization included in the process is referred to as 'boundary' of the footprint.
  • Normally, this includes:
    • The full range of emissions that the organization controls directly.
    • Typically (but not always) includes subsidiaries and leased assets.

COLLECT EMISSIONS DATA

  • The next step is to consider what types of emissions will be included. It may include collecting information on:
    • Onsite fuel consumption.
    • Owned transport utilization.
    • Emissions from chemical reactions in manufacturing processes or from land use or agricultural activities.
    • Electricity consumption.
    • Employee travel by air, rail, and in vehicles not owned by the organization.
    • Suppliers' emissions.

VERIFY RESULTS

  • Verification is done by an independent third party.
  • Verification typically involves:
    • Analysis of the methodology.
    • Data collection techniques.
    • Calculation process.
  • Different levels of assurance or verification of results are available.
  • Greater levels of assurance or verification is more expensive to achieve.

DISCLOSE THE FOOTPRINT

  • If the footprint is to be disclosed in advertising material, the following information must be made available:
    • Methodology used to calculate the footprint.
    • Boundary conditions.
    • Types of emissions included and excluded.
    • The data collection techniques.
    • Any assumptions or estimates that were used through the process.
    • The level of verification of the results provided by independent third parties.

REDUCING CARBON FOOTPRINT

  • At no cost:
    • Promoting energy awareness to all employees and encouraging them to turn off lighting when not in use.
    • Unplug battery chargers when the tool is charged.
    • Maximize the use of daylight; do not turn lights on when daylight is sufficient.
    • Remove obstructions from radiators.
    • Turn off heating when doors or roller shutter doors are open.
  • Low to medium cost:
    • Replace all lamps and tubes with low energy versions.
    • Consider installing movement and daylight sensors in areas frequently used such as corridors, toilets, and storage areas.
    • Draught-proof windows and doors.
    • Increase loft insulation.
    • Ensure boilers are maintained and serviced.
  • Long-term investment:
    • Consider installing micro-generation at business premises.
    • Replace single-glazed windows with double-glazed alternatives.
    • Choose energy-efficient equipment and tools.
    • Replace old boilers with modern energy-efficient alternatives.
    • Fit an insulated suspended ceiling in rooms or workshops with high ceilings.
    • Choose fuel-efficient vehicles.

GLOSSARY

  • Assurance: The process of an independent third party checking the methodology, data, and calculation processes to ensure they are robust.
  • Carbon neutral: Terminology for something having net-zero emissions (for example, an organization or product).
  • Emissions conversion factor: Enables a conversion to be made from the input measure of energy to the amount of carbon dioxide emissions that will result.
  • The Greenhouse Gas (GHG) Protocol:
    • A widely used standard for emissions reporting.
    • Covers project emissions reporting and corporate emissions reporting.
    • The corporate emissions reporting standard provides a methodology for the calculation of a carbon footprint.
  • ISO 140645:
    • ISO 140645 is an international standard for corporate emissions reporting.
    • It builds on the approach outlined in the Greenhouse Gas Protocol.

NEED FOR CARBON CREDITS

  • Emitters:
    • Burning of fossil fuels
    • Rotting vegetation
    • Industrialization
    • Volcanoes
  • Reservoirs:
    • Trees and forests
    • Oceans
    • Photosynthesis
  • In modern times, the burning of fossil fuels like coal, oil, and natural gas (in which carbon has been stored for millions of years) combined with accelerated land clearance has led to:
    • Exceptional levels of greenhouse gas emissions
    • An enhanced greenhouse effect, which will result in very rapid warming of the world's climate
  • The results will likely include intensified droughts and floods, changed weather patterns, agricultural breakdown, ecosystem disruption, rising sea levels, epidemics, and social breakdowns that ultimately threaten the lives or livelihoods of hundreds of millions of people.
  • Carbon credits:
    • Encourage compliance and financial managers to pursue cost-effective emission reduction strategies.
    • Provide incentives to emitters to develop the means by which emissions can inexpensively be reduced.
    • Stop the increase of carbon dioxide emissions.

CARBON TRADING

  • Trading of carbon credits:
    • Buying carbon credits is not a charitable donation but a retail action.
    • Trade in carbon credits has the potential to make forestry more profitable and to sustain the environment simultaneously.
  • One of the primary solutions for climate change being thought by global warming alarmists is the purchase and sale of carbon credits.
  • For trading purposes, one credit is considered equivalent to one tonne of \text{CO}_2 emissions.
  • Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price.

VALUE OF CARBON CREDITS

  • Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air.
  • Carbon credits are measured in tons of carbon dioxide.
    • 1 credit = 1 tonne of \text{CO}_2.
  • Each carbon credit represents one metric ton of \text{CO}_2 either removed from the atmosphere or saved from being emitted.
  • The carbon credit market creates a monetary value for carbon credits and allows the credits to be traded.
  • For each tonne of carbon dioxide that is saved or sequestered, carbon credit producers may sell one carbon credit.

GENERATION OF CARBON CREDITS

  • Many types of activities can generate carbon offsets.
    • Renewable energy such as wind farms or installations of solar, small hydro, geothermal, and biomass energy.
  • Other types of offsets available for sale on the market include those resulting from energy efficiency projects, methane capture from landfills or livestock, destruction of potent greenhouse gases such as halocarbons, and carbon sequestration projects (such as reforestation) that absorb carbon dioxide from the atmosphere.

CARBON CREDITS - KEY POINTS

  • Certificates are issued to countries that reduce their emission of greenhouse gases (GHG), which causes global warming.
  • Came into existence as a result of increasing awareness of the need for controlling emissions.
  • One Carbon Credit is equal to one ton of Carbon Dioxide.
  • Methane and nitrous oxide have approximately 21 times and 310 times, respectively, the heat-trapping capacity of carbon dioxide.
  • Reducing methane by one ton is equivalent to reducing carbon dioxide by 21 tons.

ROLE OF CARBON CREDITS IN EMISSION REDUCTION

  • The limit for greenhouse gas emission for every organization is fixed.
  • Anyone who exceeds that limit has to pay a heavy fine.
  • So to reduce the greenhouse gas emission, some programs were made:
    1. To invest in CDM (Clean Development Mechanism) project.
    2. To buy carbon credits, i.e., carbon trading.

INVEST IN CDM & CARBON TRADING

  • Invest in CDM:
    • To sell technology to a developed country by a developing country.
    • Get the credits obtained by the use of that technology.
  • Carbon Trading:
    • If the companies fall short of the emission targets, they can buy those from the market from someone who was successful in meeting those targets and has a surplus of carbon units with them.
    • What is ultimately obtained is the reduction in the greenhouse gas emission, and the overall limit in the market remains the same.

CARBON CREDIT IN INDIA

  • India had 310 'eco-friendly' projects awaiting approval last counted in 2006.
  • Once cleared, these projects can fetch about Rs 29,000 crore in the next seven years.
  • India's carbon credit market is growing, as many players (industries) are adopting the Clean Development Mechanism (CDM).
  • The US accounts for 30% of global emissions, while India makes up 3%.
  • Now, India can transfer part of its allowed emissions to developed countries.

ORGANIZATIONS INVOLVED IN CARBON TRADING

  • Karnataka Power Transmission Corporation Ltd. (KPTCL).
  • R&S Carbon Trading Ltd. USA.
  • Renesola China.
  • Universal Display, USA.
  • Tata Chemicals, Mumbai, India.
  • ISA Power, India.
  • ITC Paperboards & Specialty Papers, India.
  • Orient Green Power, India.
  • Green Ventures International, India.

CONCLUSION

  • It can be concluded that carbon footprints as well as carbon credits carries an importance in our daily life.
  • Everyone should realize its effect and should try to protect the nature from its adverse effects.
  • The carbon credit business is a rapidly changing business, and people should be aware that market rates, protocols, and registration programs can change quickly.