ACCELERATING
SUSTAINABLE GROWTH

Forest carbon credit considered as a non visible forest product” that can be a viable alternative source of income for forest landowners. It’s a metric ton of carbon dioxide equivalent (CO2e), of whichthe emission is newly sequestered and is purchased by GHG emitters as a cost-control measure to make up for emissions occurring elsewhere.

Managing forests for carbon emission offsetting gives the world the opportunity to reverse or at least sequestered the emissions that they have already made or they are about to make into the atmosphere. The total GHG emissions are increasing rapidly. Most of the GHG emissions of all time have been done in the last 40 years of our existence. More GHG emission mean climatic shifts which leads to intensive droughts somewhere and acute floods in other areas of the world. Because of those blindly done deforestation which hampers the smooth functioning of the forest and gets in the middle of the process of habitats having their share of biodiversity.

Researches around the world point to a fact that forests can play a vital role in mitigating the inimical effects of climate change and can help in putting a shackle on this ever-increasing global warming. Quality and Quantity of herbs, restoring the disbalances caused by humans in nature, water as a resource in quantity & quality, providing wildlife a habitat to call home and protecting biodiversity in that habitat.

Forest & Carbon Offset

To get an understanding of the carbon offset markets, we need to know how CO2 is measured and traded for various purposes. CO2 being the major contributor as the GHGs in the atmosphere, promoting global warming. All other gases are not actually come that much into consideration because CO2 is more easily measurable that others. The carbon unit in which it is measured is “metric tons of CO2 Equivalent” often seen written as MtCO2e or tCO2e & also called as “Carbon Credit or Carbon offset”. Currently sellers of carbon offsets are majorly forest landowners who are looking to opening up different forest-based revenue streams by helping out the GHG emitters in exchange of a handsome payday.

Carbon Marketplaces

There are two distinct types of carbon markets; voluntary and compliance markets

Carbon markets are divided into two subdivisions – voluntary &compliance markets.

Voluntary markets exist where companies or individuals buy carbon credits for purely a voluntary basis. Many companies voluntarily purchase carbon credits to demonstrate their commitment to protecting the environment and to demonstrate corporate social responsibility.

Voluntary markets are there for the individuals and companies so that they buy the credits for the sole purpose of showcasing their concern towards the environment, its well-being and their willingness to go above and beyond to correct it. It fulfils their commitment to live up to the corporate social responsibility they owe to the society.

Prices for the carbon offset in voluntary market, globally, can fall anywhere between a wide range.Forest authorities & land usage projects are somewhat larger voluntary carbon project categories than any other kind. There are numerous factors that influence the price determination of carbon credits at the very point in time for e.g.,the type & location of project that is put up against asking for the credits, additional deemed project benefits that will play out to be an influencing factor, marketing efforts & many others.

The emission stays within limit as it is cancelled out by the very nature of the deal and there is no margin left to betray the environment in any case.

Compliance Carbon Market

Compliance carbon markets are such marketplaces through which “regulated by the cap & trade” entities obtain & surrender emissions allowances or better known as ‘offsets’ in order to meet predetermined regulatory targets.

In case of cap & trade programs; participants i.e., both emitters and intermediaries such as financial institutions; both are allowed to trade allowances to make profit from the unused allowances or for meeting regulatory requirements.

Humans don’t realize the importance of saving the environment unless the effects of their doings dawn upon them to destroy their existence; It's not all their fault because the average human life is 79 years (give or take) & earth is so vastly big that the effects of what humans do, don’t reflect until the generation which actively got involved to do it, gets wiped off the face of the earth in a natural biological life course. The next generation then again takes time to get acquainted with the fact that there are ill effects of what is being done.

Talking about the health of our mother earth; here are 5 shocking facts to put things into perspective:

1. Witnessing irreversible effects by 2030

If global warming goes above the recommended limit; more than 70% of Earth's coastlines will have their sea-level rise greater than 0.66 feet (0.2 meters), resulting in excessive coastal flooding, beach-sand erosion, salinization of water supplies & other impacts on humans & ecological systems which will be very harmful to the human life on earth. (Source: https://climate.nasa.gov/)

According to the findings of the survey conducted by the UN Inter-governmental Panel on Climate Change (IPCC), critically urgent action is needed to avoid the catastrophic effects of global warming over the world. Without the change in our actions towards our environment, we would see an increase in widespread flooding, extreme heat, drought & poverty.

2. Greenhouse gas levels are ever-peaking

Due to the rise in earth’s temperature, greenhouses gases accumulation is affecting nature’s natural processes more than ever. Fossil fuels combustion, Carbon-mono oxide emissions, & the environmental impact because of intensive farming has filled the atmosphere with CO2.

Scientists say that this is the fastest & the largest increase in CO2 emissions; the world has ever seen.

3. Species headed straight towards early extinction

One of the environmental deterioration signs is the extinction of various species from earth, be it animals, birds, reptiles etc. Most of other species' existence are endangered too

The Millennium Ecosystem Assessment, which involved more than 1000 experts, says that about 24 species a day get wiped out from the earth which comes to about 8700s species, per year (Source: e360.yale.edu).

4. Climate change is creating a refugee crisis

As global temperature sees a rise, millions of people living in areas that are very much prone to sudden collapse due to any natural adversity are fleeing their homes to avoid the impacts of potential droughts and foreseeable extreme storms. These numbers are only set to rise in the coming future. The International Organisation on Migration gauges that up to 200 million people would be displaced by the effects of climatic changes by 2050.

(Source: https://www.worldbank.org/en/news/press-release/2021/09/13/climate-change-could-force-216-million-people-to-migrate-within-their-own-countries-by-2050)

5. Our oceans are dying

Our planet is only as healthy as its oceans. The UN has warned that marine life faces irrecoverable damage from the millions of tonnes of plastic waste that ends up in the oceans, every year. More than half of the world’s coral reefs have died in the last 30 years, and 2/3 of the Great Barrier Reef has been damaged by coral bleaching; due to sea temperature going too high up.

(Source: https://www.nationalgeographic.com/science/article/scientists-work-to-save-coral-reefs-climate-change-marine-parks)

The earth itself indeed acts like a living organism; it restores what is being destroyed. But we are causing more damage than the earth can repair. The natural flooding, timely earthquakes, the occasional droughts don’t affect the earth one bit but it destroys human, animal and plant life as we know it.

The Earth will stay alive and kicking much longer after the last traces of the human race could be found on its land. So, it is our decision to challenge the natural course of action or to get aligned with it.

It's high time we take control and make positive changes otherwise doomsday is just around the corner waiting for us

Global warming is affecting the Earth more viciously than expected. The alarming rate at which the glaciers are melting and the sea levels are rising threatens the mass extinction of every species on the planet.

To counter this challenge, governments around the world came together and have designed a market-based system called carbon trading, under the Paris Agreement, to control and regulate the carbon emitted by businesses, especially the ones that are heavily dependent on fossil fuels.

How does carbon trading work?

There are multiple models designed to facilitate carbon trading, but the recent and successful one is the Cap and Trade scheme.

Cap and Trade Scheme

In this scheme, the government sets a limit on the emission over a time period and allots a fixed number of permits to compensate for the pollution. Each carbon permit is equal to one tonne of CO2 equivalent. Therefore, companies need to track their carbon footprint to comply with the carbon trading scheme.

Businesses that effectively reduce their emissions and manage to spare some carbon credits can auction them for money. Similarly, companies who exceed their carbon emission threshold limit can purchase carbon credits from these auctions.

Carbon Offsets

Another way companies aim to compensate for their exceeding their cap limits is by buying carbon offsets in the free market. Carbon offset refers to any activity which reduces the emission of greenhouse gases elsewhere.

Usually, the sellers of these offsets are project developers who design carbon-reducing systems and technology. Hence, each ton of carbon that is avoided polluting the environment counts as one carbon offset.

Advantage of Carbon Trading

Carbon trading has collectively involved the prime polluters from the developed countries to implement technologies that reduce their emissions. As these companies are majorly dependent on fuels, they usually exceed their allotted threshold, and hence are forced to buy carbon credit from the developing nations, providing the latter with the financial aid it needs.

Carbon trading also provides the flexibility to businesses to change their operations at their own pace. For example, small businesses can easily implement the latest technologies to reduce their carbon footprint and auction the spare carbon credits. Likewise, big corporations can buy these carbon credits to compensate for excess carbon emissions.

Disadvantages of Carbon Trading

Although carbon trading has lowered the carbon emission of many businesses, the scheme is still loose-ended and can be exploited by some companies via its loopholes. As the west is adapting to the concept, there�s still a lot of room for its improvement.

Nevertheless, carbon trading schemes are a work in progress and with stricter laws and controlled demand and supply of carbon permits, the scheme can drastically help the world counter global warming