Climate change is one of the greatest challenges facing humanity today. Greenhouse gas emissions (GHGs) from human activities are contributing to global warming, and its devastating consequences are becoming increasingly evident.
In the fight against climate change, carbon markets have acquired vital importance by playing a crucial role in reducing greenhouse gas emissions and promoting the transition to a more sustainable economy. Next, we will explore the basic principles of Carbon Credits and the importance of their trading.
Strictly speaking, a carbon credit or carbon offset represents one ton of CO2 which previously existed in a gaseous state in the atmosphere but, as a result of the implementation of a carbon sequestration project, is now stored in a solid state. There are various methodologies that allow for the quantification of this sequestration, and many international organizations behind compensation programs that certify and issue these credits.
Under this context, all records are based on basic principles to guarantee the integrity of carbon credits and the removals generated:
- The estimated GHG removals should not result from incomplete or inaccurate emissions accounting; in other words, they must be real and conservative, ensuring that the removals are not overestimated.
- All removals must be additional to those that would have occurred in the absence of the development of a carbon capture project, for example, by law or what is known as "business as usual."
- The removals should be permanent over time.
- All removals must be verified by a qualified third party that can validate compliance with the prescribed methodologies.
- The generated credits must be unique and be associated with a single record specifying the type of activity through which they were generated, thus avoiding the double counting.
With this information on the table, we can understand that there are rigorous guidelines that regulate the certification and issuance of bonds, however, this opens the door to the following questions: If all issued bonds follow strict scientific methodologies and meet requirements to be eligible, what sets one bond apart from another? Are there bonds of higher or lower quality? What can we do to ensure that the bonds we are acquiring meet the intended objective?
The answers are not simple, and a series of factors must be considered to evaluate whether the bond in question is compatible with our objectives and needs.
Generation of additional co-benefits
It is important that we, as buyers, ensure that the project generating the bonds we are going to acquire has additional co-benefits, meaning it is creating local employment, promoting biodiversity conservation, or contributing to the implementation of a social program. This will allow us to fulfill the main objective of this tool: Sustainable Development.
Action aimed at equity
Carbon credits must be in line with the 17 Sustainable Development Goals (ODS) and the approach of fair transactions to transition towards a low-carbon economy. Simultaneously, this economy must promote social equity, inclusive well-being, and resilient climate development.
Transparency and communication of results
It is important to clarify the commitments and scopes involved in carbon capture projects through which these credits are generated, meaning transparency in the quantification, validation, and issuance processes, as well as in marketing; they should be visible and subject to due diligence to ensure compliance. Similarly, it is important for all actors involved in the development of these projects to communicate the results optimally and transparently to avoid falling into practices of “Greenwashing”. This always implies keeping in mind that actions for the environment are the main standard and that this is not merely the result of buying bonds.
At Carbon Plus, we are convinced that generating carbon credits through the implementation of forest carbon sequestration projects is just the first step towards achieving a carbon-neutral society, driven by climate action and community development. In the same vein, we also reinforce the idea of not only generating economic benefits through the sale of bonds but also investing in comprehensive projects with social and environmental impact, for people and biodiversity, that allow us to add a "Plus" to our bonds.
As part of our commitment to end-users, we work with the highest certification standards for carbon credits (CAR, VCS, Gold Standard, REDD+), and in all our projects, we will develop a Plan for Sustainable Land Management (PSLM), which will allow us not only to mitigate the risks associated with the project but also to implement social, productive, environmental resilience, and economic initiatives that adapt to the specific needs of each community.
Likewise, we delve into strengthening local capacities and ensure the social safeguards of our communities, promoting inclusion, communication in their native languages, and internal governance mechanisms. If you are interested in learning more about how we make this possible, please check out the "Our Projects" section.
Undoubtedly, forest carbon sequestration projects have many aspects. However, the common denominator should be to generate high-quality carbon credits, which is only possible if we synergize with communities, local partners, and end-users to ensure a "Plus" in the projects.
