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Three reasons why carbon credits are key to fight climate change


A recent Time article asserts that “Carbon Credits Should Be One of Our Best Tools to Fight Climate Change — If We Use Them Right”. We couldn’t agree more.

Voluntary carbon credits, if used right, can effectively distribute financing into much needed carbon reduction projects, which may also offer co-benefits to local communities bearing the brunt of climate change.

Credits are typically grouped into two carbon reduction components: avoidance and removal. The article differentiates three main options that can uniquely help to achieve meaningful climate action:

1. Avoidance credits enable organisations along their decarbonisation journey to rapidly offset interim emissions by funding the reduction of emissions elsewhere. Given current rates of decarbonisation, offsetting will be essential to achieving 50% reduction in emissions by 2030.

These credits tend to be underpinned by cheaper traditional projects, such as cookstove conversion, which has created a perception that they are an affordable “license to keep emitting”. With the right incentives and clarity, offsetting can direct money to developing nations where it is most needed to transition from fossil to clean infrastructure.

Nonetheless, buyers must bear in mind that these credits offer a temporary stop-gap on the journey to net zero, rather than a permanent solution, and should be subject to rigorous quality assessment to ensure they achieve the emissions offset promised.

2. Avoidance credits can also be used to protect natural carbon sinks while fostering ecosystem and community co-benefits. Peatlands, which take up only 3% of global land area, store twice as much carbon as global forests, which take 31% of global land area.

Protection-based avoidance credits are currently not differentiated from offset-based avoidance credits, which is problematic given the difference in quality of climate impact. Greater transparency in ratings would help direct funds toward the most effective natural carbon sinks with co-benefits while fostering local stewardship.

3. Removal credits can help achieve neutralization of already accumulated concentrations and residual emissions post decarbonisation. Yet removal credits currently make up a small percentage of the carbon market, and tend to be more expensive.

Currently, we barely manage to remove 100,000 t CO2 per year, while we need to remove 5–16 billion tons per year to achieve 2050 climate targets. By making the right quality criteria accessible, higher volumes of guided investments into removal credits will fuel scale up of much needed removal technologies.

CEEZER is on a mission to help drive the change needed to enable society to use carbon credits right and realise the voluntary carbon market’s potential. We help buyers create impact optimised portfolios that reflect these three options, including differentiating suppliers’ credits based on permanence, additionality risk and Oxford Category project types. To do this, our platform enables both sides with:

  • Transparent and direct trade between buyers and suppliers
  • Clarity and reliability of data to characterise credits beyond price and volume
  • Accessibility of high quality credits through a harmonised view of the market