How It Works
Despite what you might hear in some media, the global scientific community agrees that the debate about whether or not greenhouse gas emissions are causing climate change is over. The question then becomes: what can we do about it? Enter the international carbon market.
Proper measurement of greenhouse gas emissions makes it possible to reward a wide variety of activities that can reduce global GHG emissions. For example, if an enterprising farmer implements sustainable land management practices or a business builds a renewable energy project, they can earn carbon credits by demonstrating investments would not have occurred under a “business as usual” scenario; this concept is known in the industry as additionality.
Once this is established, project developers can be issued one Verified Carbon Unit (VCU) for every ton of greenhouse gas they reduce or remove from the atmosphere. Those VCUs can then be sold on the open market and therefore provide support for climate innovations that would have otherwise never taken place.
Buying (and retiring) carbon credits allows responsible companies to manage the timing and cost of reducing their own greenhouse gas footprint. In many cases, companies buy credits to complement their own efforts to lower emissions such as by improving the efficiencies of their own facilities.
Over time, this flexibility channels financing to clean, innovative businesses and technologies. Today's large, fossil-fuel dependent companies are meanwhile given time to adapt to the low-carbon economy of the future.
