The Global Cost and Consequences of Climate Change
Climate change isn’t something that most of us think about on a regular basis. We are too wrapped up in our 9 to 5 jobs, caring for kids, or busy worrying about passing our final exams to think about the future of Mother Earth.
Climate change can also be emotionally unsettling and quite mentally taxing. Unfortunately, ignoring the problem won’t make it go away, like it will when you hide under the covers as a kid. Climate change is real, it’s here, and the puzzle needs to be solved. So, what can we do as a nation, as businesses, and as individuals to start making a difference?
First let’s take a look at the current ways climate change is being tackled:
Carbon Offsetting
Carbon emissions are inevitable. Unfortunately, it’s unrealistic to think differently. Corporations are working to fight climate change by choosing greener alternatives, but the transition isn’t happening quick enough, and that’s why offsetting is vital. Individuals are working to fight climate change by changing their daily behaviors and purchases, and nations are fighting the change by creating regulations.
Let’s take a deeper look at the different types of carbon offsetting.
Legal Reasons for Carbon Offsetting
In compliance markets such as Europe and Japan, governments have set caps on their national emissions to help regulate and keep these emissions under control. Certain industries which must then offset those caps. Most commonly, these industries are heavy carbon emitters such as utility and transportation companies. When these companies go over their allowances (aka pollution permits) they must then complete in an open market to make a purchase. If there are fewer permits than projected amount of emission caps, the price goes up basically making it a market based tax.
Regulatory Reasons for Carbon Offsetting:
Companies can buy carbon credits to satisfy the increasing vocal moral requirements of investors to help garner higher investment ratings by reviewers that take sustainability into account (ESG Ratings) or to hedge against their future legal carbon emission requirements.
These credits are usually sourced as voluntary credits like the ones that InfiniteEarth Produces (learn more here).
These kinds of credits are generated under standards that were developed by the UN and administered by NGOs. Unlike the compliance credits, these credits function as long-term hedges since they have long-term expiration dates (30 years).
Corporations are already trading carbon credits; but the process is messy. The “emissions desk” of the “environmental products division” of BP and Shell are the two largest and most active carbon traders in the world. However, much of the carbon credit trading is done over the counter (OTC) through brokers.
Voluntary Reasons For Carbon Offsetting:
As climate change heats up, the more people are looking at personally offsetting their own carbon footprint. Some people have gone vegan or vegetarian, some are investing in cleaner technology for their homes by using solar, and some are even transitioning away from gas by investing in electric vehicles. However, the true activists want a way to really help offset those emissions and they are doing it by offsetting their purchases as well. Companies like UPS are adding in the option to offset emissions at checkout (carbon neutral shipment).
“UPS’s carbon neutral option supports projects that offset the emissions of the shipment’s transport. UPS has supported projects that include reforestation, landfill gas destruction, wastewater treatment, and methane destruction.”
Since most corporations haven’t included this as an option, consumers can now choose to offset their emissions by purchasing these credits directly. But why isn’t there a way to automate and offset automatically for both corporations as well as individuals? That’s the very question Veridium has set out to solve.
Looking to learn more about how Carbon Credits work? Check out our other article here: https://medium.com/veridium-labs/carbon-credit-markets-101-bc986eedabfa
We invite you to take action. Learn more about what Veridium is doing in partnership with IBM and Stellar to change the carbon credit industry by visiting veridium.io.
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