What's a Carbon Credit?
'Carbon credits' are traded in carbon markets in the global effort to reduce world pollution.The principles that underpin carbon credits are enshrined in the Kyoto Protocol.
Each carbon credit represents 1 tonne of atmospheric carbon dioxide which has been avoided or captured. It is bought by an entity wanting to reduce its carbon footprint, and it is sold to them by an entity implementing a project somewhere else that will reduce or capture carbon dioxide emissions.
Talking about carbon involves us in a complicated mix of science, economics, politics, business and the simple desire for a cleaner world. The important thing to know is that the mandatory and voluntary buying and selling of carbon credits collectively bring about the development and use of greener technology and the creation or preservation of native forests and other natural resources.
In Forest Carbon's case we develop woodland creation schemes for carbon capture. When our partners pay for the planting of a certain area of new woodland they are in fact paying for the removal from the atmosphere of a certain number of 1-tonne units of CO2 (or in effect therefore buying a certain number of 'carbon credits'). These 'credits' are not traded further by our buyers, they are instead ‘retired’ (ie cancelled against the emissions the buyer was seeking to capture) and serve only to register the amount of CO2 removal a buyer has sponsored.
What sort of carbon credits does Forest Carbon sell?
There are two 'classes' of carbon credit - compliance (mandatory) or voluntary - both suited to different types of buyer. In reality though, both types can be generated from the same types of project, and what distinguishes them is the certification processes they have been through and the reason the buyer is buying them. Compliance credits are bought by companies and countries that have to buy them, because the law says they must, and voluntary credits are bought by companies that don't have to buy them, but want to because they want to make a quantifiable and audited contribution to the environment.
The carbon credits generated by UK woodlands, certified under the UK Woodland Carbon Code, are not part of any statutory Kyoto Protocol driven international trading scheme - they are generated purely for voluntary buyers to use against their own or their customers' local emissions. The Code is a widely respected standard and in reality its credits will be of as good a quality as compliance ones.