Myth-busting carbon credits: why carbon credits can help meet our zero-carbon goal
The use of carbon credits still causes debate. But with only 10 years left to really ‘bend the curve’ or drive down emissions to avoid catastrophic climate change, carbon credits are a critical part of the solution. We outline the ‘why’.
New Zealand’s net zero target means we are committed to using them.
In November 2019 the New Zealand government passed into law the Climate Change Response (Zero Carbon) Act, which set a national target of reducing emissions of all greenhouse gas emissions (except biogenic methane) to net zero by 2050.
But net zero doesn’t mean no emissions. It means that our carbon emissions will be reduced as much as possible, but the residual emissions will be balanced by projects sequestering carbon from the atmosphere, or avoiding emissions to the atmosphere. By using this terminology, the Government (and most other players internationally) recognise that reducing to zero emissions will take time. For some of the activities we do, there isn’t a zero-carbon alternative currently available.
Carbon credits are a legitimate way of funding emissions reductions.
Financing a carbon credit project through the carbon credit market is a way to ensure reductions that would otherwise not happen – they are additional to business-as-usual. Put another way, projects that are issued carbon credits would not have been financially viable without the revenue from the carbon credits. The project may have required such substantial capital to develop, install, or maintain, that no government or business would have implemented it without the additional funding. High quality carbon credits meet stringent standards to ensure they are above business-as-usual, along with other requirements that ensure they are real and valuable (beyond carbon reductions). You can read more about that here.
It’s not greenwashing – using carbon credits incentivises rapid carbon reductions.
Research by Forest Trends found that organisations that balanced their emissions by using carbon credits cut their direct emissions by almost 17% beforehand. Companies that chose not to purchase carbon credits cut their emissions by less than 5%. This is because carbon credits are an investment like any other; few businesses make this commitment without first working to reducing those ongoing costs as efficiently as possible.
The atmosphere doesn’t care where the reductions come from.
We all share the same atmosphere, so meaningful carbon credit projects address the carbon imbalance regardless of their location. While many organisations may choose to support specific carbon credit projects to align with their products or marketing goals, ultimately all high-quality projects are valuable to our atmospheric goals, regardless of what geographic location the project is located in.
Projects like renewable energy, landfill gas capture, and solar powered cookstoves help build infrastructure as well as realise local economic and community benefits. Solar powered cookstoves, for example, reduce carbon emissions, while improving health outcomes for women and girls who are more exposed to dangerous indoor air pollution from business as usual cooking options. Forest sequestration projects in New Zealand (and elsewhere) incentivise caring for indigenous forest and protecting the habitat of birds, animals and insects.
These benefits are not just atmospheric - research conducted by ICROA shows that "offsetting one tonne of carbon dioxide brings an additional $664 in benefits to the communities where carbon reduction projects are based”. Credits from international sources can support smaller developing economies, who are less equipped to transition to a low carbon economy without external investment.
Ultimately, doing something is better than doing nothing.
Tackling climate change is a huge challenge and one that is going to define our next decades. The most critical step in reaching our net zero target is the first. You have to start doing something.
Emissions reduction is critical, but most businesses will still have a carbon footprint of some sort, even if they reduce their emissions as much as they possibly can. Supporting carbon credit projects realises atmospheric and other benefits – and is far better than doing nothing at all.
Until we reach a zero emissions world, we need to take responsibility for the unavoidable emissions we create. Offsetting these emissions through carbon credits is an effective and efficient way of doing this – and at the same time has social and environmental benefits.
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