Trade Carbon Credits
Fair trade carbon credits (FCCs) are a form of climate finance, a tangible means to reduce greenhouse gas emissions. FCCs can be purchased by anyone who wants to make a positive contribution to the world’s climate. However, identifying and defining the right credit for the right project is often a challenge. The market is highly heterogeneous.
In the last few years, the trade carbon credits market has grown rapidly. With the goal of limiting global warming to 1.5 degrees Celsius and the EPA’s adoption of new emission standards, businesses and individuals alike have been looking for ways to do their part.
This market is largely unregulated, which allows companies to use the voluntary market as an avenue to generate environmental benefits. These benefits can range from economic to social to ecological, and are not restricted to specific projects. Many of these projects are in developing countries, where the effects of climate change are felt most intensely.
Fair Trade Carbon Credits
In order to qualify for certification, projects must meet several requirements. First, they must show that they have reduced their greenhouse gas emissions by a certain amount. Second, the project must demonstrate a mix of direct and indirect emissions reductions. This includes a variety of options, from installing energy efficient cookstoves to reforesting. Third, the company must be willing to commit to a net-zero-emissions target.
The market has been a whirlwind of activity, with over 33 million tons of CO2e traded in 2006. In 2007, the global market grew to $64 billion. A large portion of the trading took place in the European Union. Another large component was in the U.S., where the Chicago Climate Exchange saw $72 million traded.
The United Nations Development Programme has also joined the market. It provides guidance on how to produce carbon credits, and it works with governments to make these credits available. The UN secretary general also created a high-level taskforce to evaluate the integrity of net-zero claims.
One organization has been using an effective carbon management model to create value for farmers in tropical forests. It pays subsistence farmers for their efforts to reforest the region. The company then sells the credits to corporations. In addition, it employs trustless methodologies.
The fair trade labelling system once found a home on coffee, but now you can find it on carbon offsets. Whether you are a consumer, a business, or a politician, purchasing a Fairtrade product is a good way to promote climate change awareness. It is also a way to support smallholder farmers who are struggling to adapt to the changing climate.
Fairtrade and the Gold Standard have teamed up for a unique initiative to bring carbon income to farmers. The initiative uses a minimum price and a comprehensive monitoring system to ensure that the desired impact is realized for rural communities.
Fairtrade carbon credits can be purchased by anyone, and companies that source over 1,000 carbon credits annually must reduce their carbon footprint. This is an important step toward the achievement of the international climate goals. Unlike other protocols, the purchase of Fairtrade carbon credits represents an economically and environmentally sustainable way to cut greenhouse gases.
