At Carbonmark, we believe that environmental markets have a critical role to play in solving climate change — where every action helps shape a more sustainable future.
While reducing emissions and transitioning to a low-carbon economy are non-negotiable goals, the sweeping changes necessary to achieve them take time — time we can’t afford to waste.
That’s why we empower companies and individuals to take climate action today. By leveraging carbon credits, you can directly support verified projects that reduce global emissions, protect critical ecosystems, foster community development, and implement innovative technologies.
Why should you prioritize climate action? What are carbon credits, and how do they drive impact? At Carbonmark, we simplify the path to climate solutions, ensuring that your efforts create real, measurable change. Let’s explore how you can take part in it.
Carbon Credits Explained
Carbon credits are a market-based mechanism designed to incentivize the reduction and removal of greenhouse gas (GHG) emissions.
Each carbon credit typically represents one metric ton of carbon dioxide (CO₂) that has been reduced, removed, or avoided. They are used in emissions trading systems and voluntary markets to help entities meet their climate goals.
Carbon credits aim to:
Offset emissions: Allow businesses, governments, or individuals to compensate for their carbon footprint by funding projects that reduce or sequester emissions elsewhere (e.g., afforestation projects).
Encourage emission reductions: Provide financial incentives to invest in clean energy, conservation, and other environmentally friendly initiatives.
Why Carbon?
While efforts to combat climate change address all greenhouse gases (GHGs), carbon dioxide (CO₂) receives the most attention for several reasons:
Prevalence of CO₂ Emissions
Largest Contributor: CO₂ is the most significant anthropogenic greenhouse gas, contributing approximately 75% of global GHG emissions.
Energy Production Driver: CO₂ emissions are heavily tied to key industrial and economic activities. Burning fossil fuels, like coal, oil, and natural gas for energy and transportation is the primary source of CO₂ emissions, making it a major focus area for mitigation.
Longevity in the Atmosphere: CO₂ stays in the atmosphere for centuries, leading to long-term warming effects, unlike other GHGs with shorter lifespans.
Global Warming Potential (GWP)
Although other gases like methane (CH₄), nitrous oxide (N₂O), and fluorinated gases (F-gases) have higher Global Warming Potentials (GWPs), CO₂’s sheer volume makes it the dominant driver of climate change.
Methane: 28–34 times more potent than CO₂ but dissipates in 12 years.
Nitrous Oxide: 265–298 times more potent but emitted in smaller quantities.
F-gases: Thousands of times more potent but are less prevalent and typically easier to control.
Measurability and Monitoring
CO₂ concentrations in the atmosphere are well-documented and are directly linked to specific activities like fossil fuel combustion. Reducing CO₂ emissions often involves large-scale interventions like transitioning to renewable energy, which can have significant environmental impacts and co-benefits for the economy, like driving innovation and creating new jobs.
How can we remove CO₂ from the atmosphere?
It can be done through initiatives specifically designed to actively remove carbon dioxide (CO₂) from the atmosphere and store it in natural or engineered systems. Alongside other funding mechanisms like grants, carbon removal projects are financed through carbon credits, which help maintain or scale their operations and, therefore, their carbon removal capacity. They often provide durable carbon storage, ensuring that CO₂ is not re-released into the atmosphere.
Here are some examples of carbon removal projects:
Nature-Based Solutions
These projects leverage natural ecosystems to sequester carbon:
Reforestation and Afforestation: Planting trees in degraded or deforested areas to absorb CO₂.
Soil Carbon Sequestration: Improving agricultural practices (e.g., no-till farming, cover cropping) to enhance carbon storage in soil.
Wetland and Peatland Restoration: Protecting and expanding these natural sinks to store carbon and prevent further emissions.
Mangrove Restoration: Rehabilitating coastal ecosystems that store significant amounts of carbon in their soil and biomass.
Seaweed Cultivation: Growing and sinking seaweed in the deep ocean to sequester carbon.
Engineered Carbon Removal
These projects involve innovative technologies to capture and store carbon:
Direct Air Capture (DAC): Machine capturing CO₂ straight from the air, which is then stored underground or used in products.
Bioenergy with Carbon Capture and Storage (BECCS): Combination of biomass energy production with carbon capture to sequester emissions.
Mineralization: Using rocks and minerals to chemically bind with CO₂ and form stable carbonates.
Biochar: Burning organic material in low-oxygen conditions to obtain charcoal, which stores carbon for centuries and can improve soil health when applied to farmland.
Carbon Credits: Verification and Tracking
How do we know carbon has been actually removed from the atmosphere when purchasing carbon credits?
Each carbon credit passes through the verification process.
Independent organizations, often referred to as "carbon credit standards" or "certifiers,” oversee and verify carbon credits. These organizations establish rigorous methodologies for calculating, monitoring, and verifying emissions reductions or removals.
Here are some of the most widely used standards:
The Gold Standard: Focuses on projects that also deliver social and environmental benefits.
Verified Carbon Standard (VCS) by Verra: One of the most significant global standards for voluntary carbon markets.
Global Carbon Council (GCC): Gaining recognition in the Middle East and North Africa regions.
Clean Development Mechanism (CDM): Credits are verified as Certified Emission Reductions (CERs) under the Kyoto Protocol.
Cercarbono: A Latin America-based standard focused on fostering sustainable development and high-quality carbon credit projects across diverse sectors, including forestry and agriculture.
Indian Carbon Registry (ICR): An India-centric platform promoting transparency and credibility in carbon markets, supporting projects aligned with sustainable development and emission reduction goals.
The same organizations usually operate carbon credit registries. A carbon credit registry is a digital database that tracks the ownership and transfer of carbon credits. It acts as a central repository for information on carbon reduction projects, the carbon credits they generate, and their ownership history. The purpose of carbon registries is to provide transparency by making information on projects, credits, and transactions publicly accessible. This helps to ensure the integrity of the carbon market and prevent double counting of emissions reductions.
A carbon credit’s lifecycle within the registry
Project Registration: It records details about carbon reduction projects, including their location, type, and expected emissions reductions.
Credit Issuance: Once a project is verified and certified, the registry issues carbon credits, each representing a specific amount of carbon dioxide equivalent (CO2e) reduced or removed from the atmosphere.
Credit Tracking: The registry tracks the ownership of each carbon credit, recording transfers between buyers and sellers.
Credit Retirement: When a carbon credit is retired, it is permanently removed from circulation, ensuring that the associated emissions reductions are not claimed multiple times.
The verification process before the carbon credit enters the repository typically follows these steps:
1. Project Design
Methodology Development: Each project is designed according to the guidelines provided by a carbon credit standard. For example, a reforestation project would calculate the anticipated CO₂ sequestration using approved scientific methods.
Additionality Test: Demonstrates that the emissions reductions are additional to what would have occurred under a "business as usual" scenario. This is a crucial concept in carbon markets, as it sets requirements ensuring the financing made available through carbon credit sales is necessary to achieve economic viability for a carbon reduction or removal project.
2. Validation
Third-Party Audits: Independent auditors review the project design and methodologies to confirm compliance with the selected standard.
Approval: The project must meet all the standard’s criteria before it begins generating credits.
3. Monitoring and Reporting
On-Site Monitoring: Continuous or periodic monitoring ensures the project delivers the promised emissions reductions.
Data Collection: The project developers collect data on factors like CO₂ sequestered, methane avoided, or renewable energy generated.
4. Verification
Third-Party Verification: A separate auditor, accredited by the standard, reviews the monitoring data to confirm that the reductions or removals have occurred as claimed.
Issuance of Credits: Verified emissions reductions are converted into carbon credits and recorded in a registry.
Voluntary Carbon Market: Catalyst for Change
Despite its small size compared to the compliance carbon market (CCM), regulated by governments, the voluntary carbon market (VCM) plays a vital role in mitigating climate crises.
Extra Funding for Climate Projects: The VCM complements the CCM by mobilizing private capital towards climate mitigation and adaptation projects. This additional funding can help scale up projects that might not otherwise receive investment.
Incentivizing Innovation: The VCM encourages innovation in carbon reduction technologies and nature-based solutions by creating a market for carbon credits. This can lead to the developing of new and more effective ways to reduce emissions.
Supporting Sustainability Worldwide: VCM often focuses on developing countries, providing benefits like job creation, poverty reduction, and biodiversity conservation.
Voluntary carbon credits also offer several advantages over compliance credits, including:
Project Diversity
Because of being less regulated, voluntary markets offer a wider range of projects, from renewable energy to reforestation and sustainable agriculture. This allows companies to choose projects that align with their specific goals and values. Companies can also invest in projects in different geographical regions, fostering global impact and diversification.
Source: Ecosystem Marketplace
Additional Environmental Impact
Voluntary credits enable companies to go beyond regulatory requirements. Many voluntary projects generate additional environmental and social benefits, such as biodiversity conservation, improved livelihoods, and reduced air pollution.
Innovation and Market Development
The voluntary market, which is more flexible than the compliance market, can drive innovation in climate solutions by incentivizing the development of new technologies and approaches. As demand for voluntary credits increases, the market can expand, leading to greater investment in climate action.
How Carbon Credits Benefit Businesses
The VCM offers an excellent opportunity to enhance brand reputation. Voluntary credits can become a vital part of Corporate Social Responsibility and an easy way to demonstrate companies’ commitment to sustainability beyond simply complying with regulatory requirements.
As consumers are getting increasingly focused on environmental responsibility, purchasing carbon credits in the voluntary market not only contributes to sustainable practices worldwide but also helps gain a competitive edge.
However, carbon credits are more than just a way to show that the company cares about the environment — they offer tangible advantages that enhance business resilience, open new opportunities, and align with financial goals. Here’s how:
Regulatory Compliance
Many regions and countries require businesses to limit carbon emissions through regulations or cap-and-trade systems. Carbon credits offer a practical solution for meeting these requirements while maintaining operational flexibility.
Risk Mitigation
Environmental challenges like floods and droughts driven by climate change pose significant business risks, including supply chain disruptions and increasing regulatory pressures. By supporting environmental projects aligned with their operations (e.g., planting mangrove forests in flood-prone areas), companies can reduce their carbon footprint, mitigate these risks, and enhance long-term resilience.
Cost Efficiencies
Investing in emissions reduction projects through carbon credits is often a more cost-effective solution in the short term compared to implementing internal carbon reduction measures, which typically involve substantial capex. This approach allows businesses to manage expenses strategically while quickly progressing toward their climate goals.
Penalty Avoidance
Carbon credits offer businesses a flexible solution for meeting emissions caps and regulatory requirements, enabling them to fulfill their obligations and avoid costly penalties.
Attracting Capital
Companies actively involved in carbon offset initiatives appeal more to investors, especially those driven by environmental, social, and governance (ESG) principles.
Carbon credits are a transparent, measurable, and impactful way for companies to accelerate global climate progress.
By supporting initiatives such as protecting and restoring essential natural carbon sinks — like forests and marine ecosystems — or advancing cutting-edge carbon removal technologies, carbon credits play a pivotal role in keeping global climate goals within reach.
Investing in high-integrity carbon credits:
• Speeds up climate action by enabling measurable progress toward net-zero goals.
• Drives accountability by encouraging companies to measure their carbon footprint and assign value to their environmental impact.
• Channels funding to critical projects that significantly reduce emissions while fostering sustainable development and community resilience.
Ready to take action? Explore available carbon credits on Carbonmark’s Marketplace to discover and support verified carbon credit projects that make a real difference for our planet and people.
We invite you to become a driver of positive climate impact!
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