CARBON CREDITS, EXPLAINED IN 4 EASY STEPS
1. Carbon Credits are certificates representing carbon emissions reductions from clean energy Projects.
2. Depending on the Project, some types of Carbon Credits are also attributed with environmental and/or humanitarian benefits.
3. By purchasing Carbon Credits, a Buyer is permitted to emit its own C02-equivalent gases, and has also taken ownership of the side effects of combusting carbon-heavy fossil fuels in commerce, industry and personal use.
4. A Seller recovers costs accrued in the Project.
The GHG Protocol Corporate Standard classifies a company’s GHG emissions into three ‘scopes’.
WHY ARE CARBON CREDITS AN EFFECTIVE TOOL?
- Carbon Credits offer a standard.
- They are the most commonly used instrument to offset carbon reduction.
- They have values that are established by market forces and can be bought and sold.
- Carbon Credits undergo thorough monitoring, verification and reporting processing, after any optimization of energy and elsewhere, applying parameters provided upon the United Nations Framework Convention on Climate Change. Only then, can they be certified.
- Each type of carbon credit certification has its own distinctive value.
- This value is determined by the Sustainable Development Goals.
- Typical certification standards are: Voluntary Carbon Standard, the Social Carbon Standard, the Gold Standard and the Renewable Energy Certificates Standard.
- Renewable energy projects such as solar and wind energy are more adaptable (and less invasive) to integration with the populace.
- Taken collectively, the use of Carbon Credits as Offsets helps improve economic, environmental and social conditions.
HOW DO I USE AND RETIRE MY CARBON CREDITS
- Carbon Credits fulfil their purpose when they are retired to become Offsets. Their retirement, is permanent.
- Once retired, the carbon credit can no longer be re-used, and they are accounted for at international registries.
- Carbon Credits are proof of action and are useable by any organization/individual to offset their carbon emissions footprint.
- Carbon Credits are best used as accompaniment with an organization’s efforts to optimize its own day-to-day reliance on activities with emissions byproducts.
- Carbon Resources Exchange International Pte Ltd is an legitimate member of various international registries.
- Our CRX Retirement Certificate is as an official record of retirement of carbon credits, and highlights the following:
- The name of the party in whose name the certificates so retired, be it VCS, CERs or GS
- The type of certificate
- The unique serial numbers of certificates so retired.
- The name of the organization that issued the certificate
WHEN HAVE CARBON CREDITS BEEN USED SINCE ?
- Carbon Credits began to be actively used from 1997. There is a 20 year track record in development.
- Since the consequences of changing weather patterns have been overwhelmingly linked to greenhouse gas emissions, countries worldwide are taking action to fight climate change, to alleviate poverty, and propel the economy.
- Post the COP21 Paris Agreement, where 190 countries have taken on targets to reduce emissions, carbon credits is now a standard measure of emissions reductions.
- Article 6 of the Paris Agreement provides for market measures to be rolled out globally.
- Carbon Credits are the leading mechanism for regulating climate change.
WHERE DOES MY ORGANIZATION BENEFIT FROM CARBON CREDITS
- Achieves carbon footprint reduction targets set by the company.
- This effectively puts a price on carbon.
- Creates brand differentiation and opens affiliations with sustainability-minded suppliers and clients.
- Supports sustainable development by financing clean energy projects. Many of these projects also prioritise community development focused on socio-economic development in the lesser developed countries (LDCs)
- Helps enhance Corporate Social and Environmental Responsibility initiatives.
- Achieves resilience against emerging governmental regulations, such as Singapore’s upcoming carbon tax.
ON GREENHOUSE GAS (GHG) EMISSIONS
- Carbon Emissions are classified into 3 scopes:Scope 1 emissions are direct emissions resulting (directly) from your assets through power generation or chemical/mechanical processes. Scope 2 emissions are indirect emissions arising (Indirectly) from power consumption. e.g. the energy transmitted by the grid. Scope 3 emissions are indirect emissions arising (indirectly) through supply-chain/logistics/products purchased.