Carbon offset programs and carbon markets are an important part of green tech and cleantech, a way for businesses to reduce their total environmental impact and a way for farms to generate significant additional income. Essentially, they work by allowing businesses to help fund projects that reduce greenhouse gas (GHG) emissions outside of their own companies. So, when a business has emissions that are impossible to reduce, they can still minimize their total carbon footprint by helping to lower emissions elsewhere. This plays out on the farm through practice change that reduces net emissions from cropping or livestock production systems.
There are seven important greenhouse gases associated with human activity and some of them are far more effective per unit of mass than carbon dioxide in driving climate change. In carbon accounting all the greenhouse gases are converted to carbon dioxide equivalents (CO2e). For example, nitrous oxide is considered 298 times more effective than carbon dioxide, so reducing nitrous oxide emissions by 3.4 kg is equivalent to a 1,000 kg reduction in carbon dioxide or one tonne of CO2e. In crop-based agriculture, increasing soil organic carbon levels and improving nitrogen management are the main opportunities for reducing GHG emissions and creating carbon offsets.
What is a Carbon Offset?
The carbon market is a system for buying and selling carbon offsets, also known as credits or tokens. Each offset is a digital environmental asset that represents the equivalent of one metric ton (2,205 lbs) of carbon dioxide or tCO2e that was either removed from or prevented from entering the atmosphere. There are two types of carbon markets. In North America, Alberta and California currently have regulated markets. Industries that are required to reduce or limit their GHG emissions can do so in part by buying regulator (government) approved carbon offsets. Many non-regulated industries also want to lower their emissions voluntarily and will purchase carbon offsets from voluntary markets. Carbon offsets for the voluntary markets are issued and tracked by registry organizations such as the Verified Carbon Standard, the Gold Standard, or the Climate Action Reserve. They are also verified by third-party “regulators” to make sure they are credible, and an actual reduction or removal has taken place.
Businesses purchase carbon offsets to reduce their overall carbon footprint. Say a company wants to have net-zero carbon emissions, to get there they start by assessing their operations and creating an inventory of their emissions. Next, they look for the most cost-effective opportunities to reduce those emissions. Let’s say a company starts with 12 metric tons of emissions per month and is able to reduce it by 5 tons; despite their best efforts, they still produce 7 metric tons of carbon dioxide equivalents. They can’t reduce that number any further internally, so they purchase 7 tons of carbon offsets per month in order to remove the carbon from someone else’s processes. Since carbon emissions are a global problem, the net environmental impact is the same as if they had reduced their own emissions, but the solution is much easier and more cost-effective.
While reducing greenhouse gas emissions is vital to mitigating climate change and preserving the environment, it’s also a major business opportunity. The global market for carbon compliance offsets is estimated at between $40 billion and $120 billion and expected to increase substantially over the next decade.
How do you remove carbon from the atmosphere?
Emission reduction projects generally achieve results in one of four ways:
- Capturing and destroying or converting greenhouse gases before they can reach the atmosphere. For example, capturing and burning gas produced in landfills changes methane into carbon dioxide. Since carbon dioxide is about 20 times less effective than methane, there is a net reduction in emissions.
- Capturing and sequestering greenhouse gases, generally by turning it into soil carbon or absorbing it into trees. These are actual removals of carbon dioxide from the atmosphere rather than reductions and are one type of nature-based solution.
- Replacing energy generated by fossil fuels with energy from clean sources like wind or solar.
- Reducing emissions by developing more efficient processes. This includes energy efficiency but can also include things like improving nitrogen fertilizer management using the 4Rs to reduce nitrous oxide emissions.
These methods can be combined as well. For example, captured methane (a greenhouse gas) can be used to generate electricity that would have otherwise come from burning fossil fuels. This sort of stacking of complimentary processes not only increases efficiencies, but it can also yield more carbon offsets.
What is a carbon footprint?
Carbon emissions, and by that we mean release of GHGs into the atmosphere, are the main cause of climate change, and your carbon footprint is the total amount of carbon emissions generated by your activities. This includes every step of the supply chain – so a clothing manufacturer’s carbon footprint would include the carbon generated in every step from growing the cotton to shipping a customer their new shirt. While the entire carbon lifecycle of products is important, companies looking to reduce their carbon footprint will set some boundaries around their footprint and focus on the emission activities they can control.
Individuals and businesses all have carbon footprints, and carbon emissions are a global problem – but that is what makes carbon offset programs effective. By offsetting your carbon emissions by reducing emissions elsewhere, you can lower the overall carbon footprint of humans at a global level.
What is Smart Carbon?
Smart Carbon is a new carbon offset program from Farmers Edge powered by a unique combination of connected field sensors, artificial intelligence, big data analytics, and agronomic expertise. It combines hardware, software, agronomy, and hands-on customer support to create a true connected acre, giving farmers and their trusted advisors a 360-degree view of their carbon footprint with data from soil to sale. By harnessing the power of technology, Smart Carbon helps to uncover new potential carbon offsets that farmers can use to their advantage.
While there are many carbon offset programs in the world today, none of them combine the efficiency and level of insight provided by Smart Carbon. If you’re looking for a world-class carbon offset solution, whether you’re a prospective buyer, a farmer, or other, get in touch and find out why Smart Carbon is the right choice for you!