Published on January 11th, 2008 | by Stephanie Evans

Carbon Credit Considerations

Carbon credits are designed to minimize personal impact on the planet. Crediting involves investing in alternative technologies or restorative projects such as reforestation efforts as one method of reducing your carbon footprint.

While this system provides an accessible way for us to participate in creating a sustainable future, we should stop and examine a few of the hotly debated considerations

Whether you’re an individual or a giant corporation, there are a few carbon credit considerations that fuel an ongoing debate.

First of all, carbon credits are difficult to verify. We all know that building a power plant will put greenhouse gases into the atmosphere, but:

If a wind farm is built in lieu of a coal plant, should the wind farm producer be given all the credit for reducing the emissions?

How do we know that the customer wouldn’t have purchased windmills instead of coal anyway?

Before carbon credits existed, green manufacturers successfully sold wind and solar generators to environmentally conscious companies. The added economic reward of carbon credits isn’t responsible for all of the carbon-free technologies on the market today, but differentiating between true emissions reductions and false ones is not an easy task.

Trees pose verification difficulties as well. Calculating the amount of carbon dioxide inhaled by a tree is rough at best, and tree-based credits come with no guarantee that the tree will stay alive. A dead tree releases its carbon right back into the atmosphere. Some studies even show that planting forests exacerbates global warming, since trees are a dark color and dark colors trap more sunlight. Beyond this, hiring a third party to clean up our pollution is irresponsible compared with restricting our fossil fuel addiction in the first place.

This brings us to the second problem: Carbon credits are not as beneficial as reductions. When a concrete manufacturer develops a more efficient production method, not only do global warming gases stay out of the atmosphere, but mercury, NOx (nitrous oxide), ozone, and other pollutants are prevented from contaminating the air as well, and the practice of energy conservation puts us on a road to carbon neutrality—the end goal of the whole concept. Some point out that by allowing companies to purchase carbon offsets, we inadvertently give them permission to continue wasting energy carelessly. A number of environmental organizations such as Greenpeace, WWF, and Friends of the Earth express hesitation with the concept of carbon offsets for this reason.

Another problem with the offsetting system relates to potential fluctuations in value. The value of carbon credits is determined by firms that set a cap on the monetary equivalent of a carbon tonne/ton. If that cap is set too high, the carbon credit’s value is reduced and it can rapidly decline with fluctuations in the economic climate. This presents a potential problem in that it becomes more cost effective for corporations to buy offsets rather than actively reduce emissions or invest in alternative technologies.