About Carbon Credits

Greenhouse Gases and Offset Credits

The "greenhouse effect" refers to the temperature regulation effect that certain atmospheric gases have on the earth. The temperature-regulating gases, called "greenhouse gases" or GHGs, form a blanket around the earth that traps some heat from the sun within the earth's atmosphere, keeping the planet warm and habitable. "Global warming," or climate change, can occur when the blanket of GHGs gets thicker. As atmospheric concentrations of GHGs increase, the greenhouse blanket gets thicker. This causes heat to be trapped in the lower layers of the atmosphere and may cause global average temperatures to rise. Implementation of Carbon Credit Exchanges help to build and test the institutions and skills needed to cost-effectively manage GHGs.

Corporations looking to offset GHG's can do so in three ways: (1) reducing internal emissions, (2) purchasing credits from other CCX or ECX members who have exceeded required reductions or (3) purchasing offsets such as those aggregated from agricultural sources. Manufacturing companies, electric power generators, and state and local governments are among those who purchase carbon credits. Recently, the demand for credits has dramatically increased, in turn, increasing the overall value of offsets.

Growth and sustainability of carbon credits have subsequently created new income sources for offset project owners dedicated to the improvement of numerous environmental services. These offset projects include forestry projects (managed forests, afforestation, and long lived wood), continuously no-tilled fields (cropland or rangeland), and on-farm methane digestion.

Carbon Aggregation - Sequestration, Credits & Storage

Carbon sequestration can be defined as the capture and secure storage of carbon that would otherwise be emitted to or remain in the atmosphere. Carbon credits work in two main areas: (1) prevention and/or reduction of carbon emissions produced by human activities from reaching the atmosphere by capturing and diverting them to secure storage, and, (2) the removal of carbon from the atmosphere to secure its storage.

Carbon is continuously cycled between land, vegetation, sea, and the atmosphere in both inorganic and organic form. Most of the carbon stored in organic matter is nonliving, occurring either in soil humus or dissolved organic carbon (DOC) in seawater. The atmosphere, in addition to comprising a major carbon reservoir, plays a critical role as a medium for rapid global exchange of CO2 and other bioactive elements.

Sequestering or "holding" carbon in soil and plant material such as trees helps reduce carbon dioxide in the atmosphere. Increased levels of carbon dioxide (CO2) can be stored in the soil through no-till planting, restoring wetlands, converting cropland to permanent grass or trees, planting conservation buffers and using cover crops.