What is Carbon Trading?

Carbon trading, or carbon offsetting, means balancing or compensating for carbon emissions in one place with a reduction in emissions in another. Since it doesn’t matter where Greenhouse Gases (GHGs) are emitted, as their effect on climate change is the same; reducing GHG emissions in Brazil or Italy is as effective as doing so locally. And while we need to reduce our personal carbon emissions, some emissions are currently unavoidable, so carbon offsetting is the way to compensate for those emissions we cannot stop.

Offsetting means paying someone to reduce CO2 in the atmosphere on your behalf.  In that way we can pay for the damage we are causing and the money stimulates the technologies we desperately need to fund transition to a lower-carbon world.

What is a Carbon Credit?

Carbon reduction projects throughout the world create a tradable 'carbon credit' for every tonne of carbon dioxide equivalent (C02-e) that is stopped from entering our atmosphere. This credit is bought on your behalf and then 'retired' so it can't be sold again; meaning that you have stopped one tonne of C02-e that otherwise would have entered the atmosphere.

There are many different kinds of carbon credits. Certified carbon credits are created by government approved abatement projects. These include projects such as harnessing landfill gas, reafforestation and sequestration, and electricity consumption reduction.

What is a Footprint?

A carbon footprint is a measure of the impact that our activities have on the environment, and in particular, greenhouse gas emissions and climate change. It relates to the amount of greenhouse gases produced in our day-to-day activities through burning fossil fuels for electricity, heating and transportation, etc.

The Australia Institute for Carbon Trading calculates your carbon footprint in units of tonnes of carbon dioxide equivalent (CO2-e), so it can be directly related to carbon credits. Some other footprint calculators work your footprint out in terms of the hectares of land your ruin over your whole life!

An alternative definition of the carbon footprint is the total amount of carbon dioxide attributable to the actions of an individual or a entity (which includes emissions through their own energy use, but also from unforeseen emissions as well) over a period of one year.

The term ‘carbon footprint’ owes its origins to the idea that a footprint is what has been left behind as a result of the individual’s activities.

What does Carbon Neutral mean?

Being ‘carbon neutral’ means that you have calculated your carbon footprint, and then eliminated the Greenhouse Gas you produce by purchasing carbon credits to offset your emissions.

But being ‘carbon neutral’ takes a little more responsibility that just offsetting. To become carbon neutral, especially for businesses, you need to reduce your carbon footprint first, and commit to continue reducing your emissions.

So, if you want to buy products that claim to be ‘carbon neutral’, make sure they have achieved this accreditation through an accredited service provide. There are lots of claims being made which are false.

Warning for businesses: you won’t become carbon neutral just by offsetting your emissions. Make sure the service being offered to you assists you reduce your footprint, before eliminating the rest of your emissions. Otherwise you won’t achieve a true carbon neutral status.

Coming Soon to Australian Institute of Carbon Trading: Carbon Neutral Accreditation. Contact us today.