alzari evson's blog : Fair Trade Carbon Credits
Fair trade carbon credits are a novel way for people and organizations to support vulnerable communities as they work to combat climate change. This is done by funding climate projects which reduce emissions. Some examples of such projects include reforestation and biogas installations.
The Fairtrade Climate Standard is a program introduced by Fairtrade International that requires companies to reduce their greenhouse gas emissions. Among other requirements, companies must disclose their greenhouse gas emissions and set goals for reducing them. Businesses who source over 1,000 carbon credits each year must put in place a plan to reduce their carbon footprint. The company may then purchase retired carbon credits from other companies. These credits may then be used to neutralize residual emissions.
Fairtrade trade carbon credits can be purchased by individuals, corporations, or other groups. The market for these products has become increasingly competitive, fueled by interest in the global climate crisis and a quest for cheaper, high-quality credits. There are numerous benefits to buying fair trade carbon credits. Besides lowering the carbon footprint, they also benefit impoverished nations, local communities, and the planet.
Some of the benefits of buying fair trade carbon credits include supporting the efforts of smallholder farmers who are among the hardest hit when climate changes occur. One investment company has even gone so far as to pay farmers to convert their fields into forests. This has been accomplished by directing water to degraded peatlands.
However, there are numerous problems with the voluntary market. In addition to the standard of quality, the carbon market is plagued by a lack of transparency and financing. It is also characterized by inadequate risk-management services and scarce financing. The market is expected to reach an all-time high of $6.7 billion by 2021. In the next few years, the price of carbon may be as high as $66.7 per metric ton. This will make it difficult to achieve the EPA's goal of limiting atmospheric concentrations to 411 ppm of carbon dioxide, which is equivalent to the current global temperature.
There is still much debate about the feasibility of the cap-and-trade system for globalizing the carbon market. While the voluntary market has gained in popularity, it has not gained the kind of public pressure that would compel the United States government to regulate it. In fact, regulators have been hesitant to embrace the idea of a centralized market, arguing that it could lead to a loss of sovereignty. There is also a debate about whether or not to implement a carbon cap.
The Gold Standard is a Switzerland-based third party certifier. This organization specializes in accountability for climate-related funding. They have verified almost 796 million carbon units to date. Their registry system includes a variety of accounting methodologies specific to different project types. In addition, their independent auditing system helps ensure that these credits are genuine.
There are numerous factors that may inhibit the globalization of the carbon trading market. These factors include a lack of transparency, insufficient risk-management services, and the unpredictable demand for credit. It is therefore conceivable that many types of projects may not be able to attract financing.
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