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What carbon offsets do
- 1. Overview » About offsets
- 2. Overview » About offsets What carbon offsets achieved 1990 2000 2010 2020 2030 2040 2050 60 50 +3,644 40 +2,994 30 Other developing +6,750 +12,050 China/India 20 Other developed +514 countries -130 10 EU -300 -1,200 Gigatones Scientific of US +500 +/- 0 consensus CO2/yr calls for 80% reduction by 2050
- 3. Overview » About offsets
- 4. Overview » About offsets How carbon offsets work Emissions baseline GHG Contract for sale of carbon credits reduction Potential Investment case emissions approved and level project finance secured Incumbent Potential Carbon technology renewable credit (fossil fuel) technology value Minimum rate of return to achieve Carbon Viability gap finance project financing (IRR) Traditional finance Carbon finance business case business case
- 5. Overview The CarbonNeutral Company The CarbonNeutral Company helps businesses meet their carbon reduction targets, so they can reduce costs, increase sales and engage staff. Whether your carbon reduction target is 20%, 50% or 100%, find out how we can help: Visit www.carbonneutral.com Call +44 (0)20 7833 6017 Email enquiries@carbonneutral.com Twitter @carbonneutralco YouTube www.youtube.com/carbonneutralco
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- Offsets enable you to reduce your emissions now and meet the target you have set. They allow you to apply a cost of carbon into your decision making and move finance to the options with the highest impact, enabling us to develop the lower cost solutions we need for the future.
- Scientific consensus demands an 80% reduction in absolute emissions by 2050 in order to stop the temperatures rising by more than 2 degrees. The --- line represents this reduction path and to deliver it we need to make a fundamental change in the way we produce and use energy.European governments have taken a lead role in developing policy to limit carbon emissions as have several other countries (this can be changed to reference particular action by a sector or region). But the simple fact of the matter is that as demand for goods and services continues to grow, powered by countries such as India and China, if changes are not made, then we will not reach the target. Carbon offsets enable these countries to adopt renewable and clean technologies that will help us reach the required target.Detail/expertise:(Source: www.climateactiontracker.org)1990 numbersUS – 22% - 6,000EU – 21% - 5,700Other developed – 27% - 7,204China/India – 18% - 4,750Other developing – 13% - 3,4882010 projectionsUS – 6,500EU – 5,400Other developed – 7,718China/India – 11,500Other developing – 6,4822020 projectionsUS – 6000EU – 4,500Other developed – 7,075China/India – 16,800Other developing – 7,132China – population expected to reach nearly 1.4 billion by 2026, growing by 0.5% a yearIndia – projected to become the world’s most populous country by 2025, growing by 1.4% a yearCombined – account for 37% of world’s population and 31% of global carbon emissionsChina – with one-fifth of the world’s population is on track to represent more than a quarter of the world’s energy related GHG emissions
- And that’s why carbon offsets are such a crucial part of the global plan – they deliver a real reduction today in the most cost-effective way, accelerate the transfer of clean technologies to the developing world and facilitate the long term solutions of tomorrow for the developed world – all in the most economic way possible.
- A project creates a carbon credit when it can prove it’s reducing the carbon emissions being produced by another activity. For instance, it replaces or reduces the in situ source of electricity which in most developing countries is generated from burning coal. One of the key tests is additionality – a project is only able to earn carbon credits if the emission reductions would not have occurred without the expectation of revenue from the sales of carbon credits.For example, with a renewable energy project, there is an existing technology that generates energy and carbon emissions. (click)A new technology or system has the potential to do a similar job for a much lower level of carbon emissions, however it costs more. (click)When the project applies for funding, much as any business has to, it has to demonstrate a business case which shows the funding will be returned. There is typically a viability gap (in this example the price of the energy will be significantly more so no one will buy it even if produced). (click)If the project is able to quantify its carbon emission reductions in line with international standards(click)It is then able to sell those credits to create a secondary revenue stream that is able to bridge the viability gap. (click)Because the viability gap is bridged the project receives the financing and goes ahead. Without this financing the project would not happen and neither would the carbon reductions – so the money from our clients directly lead to these reductions taking place.
- We help businesses measure and take credible action on their carbon emissions, specialising in the development of offset-inclusive carbon management strategies. And, most importantly, we ensure those strategies drive business value for our clients.