How to Measure Carbon Credits

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The popularity of "going green" in all aspects of personal and professional life has made carbon credits an important concept. Federal legislation has allowed carbon credits to become a form of currency; assets that can be priced and sold to others wanting or needing them. Measuring carbon credits is necessary to determine their value to the owner or to help pricing them if they are to be sold to another. Carbon accounting methods help with measurement and pricing.

Things You'll Need

  • Carbon footprint information
  • Ability to cut carbon emissions
  • Desire to combat climate change

Measure Carbon Credits

Understand the concept of carbon credits. They are designed to reduce greenhouse emissions and combat negative climate changes. By definition, one carbon credit is equal to the removal of one ton of carbon dioxide from the atmosphere. One credit is also issued if a business prevents one ton of CO2 to be emitted into our environment.

Determine the level of the current “carbon footprint” for a company or an individual. This will be the base or index when estimating the carbon credits a company may create, stockpile, or sell. Current carbon footprints can be estimated by using online calculators, software (both freeware and more sophisticated programs for sale), and simple observation. Among the common items that emit carbon dioxide, one finds cars and trucks, computers, clothing, electricity, and, even, food.

Create realistic plans and methods to reduce a carbon footprint, thereby generating carbon credits. Projects should be targeted to reduce carbon emissions or to successfully trap and process them so they will never be released into the atmosphere. Projects to eliminate or contain other greenhouse gases, like methane, also qualify to receive carbon credits.

Receive third party recognition and credit for carbon footprint reductions. Be aware that there is ongoing debate among different organizations regarding some otherwise noble efforts. For example, using wind power instead of fossil fuel may or may not receive carbon credit recognition. But, to obtain recognition, measurability, and, if needed, pricing, there are certifying groups, including non-profit organizations (e.g., the Gold Standard Foundation), public entities (e.g., the United Nations Development Programme), and for-profit companies that acknowledge carbon credits. Some, like the Chicago Climate Exchange, also act as a broker for the buying and selling of carbon credits.

Use carbon credit calculators (similar to the carbon footprint variety noted above) or carbon accounting methods to calculate carbon credits, particularly if there is a discrepancy in third party measurement. Commercially speaking, removing (or containing) one U.S. or metric ton of CO2 from the atmosphere will create one carbon credit. Should one desire to sell his certified carbon credits, he will learn that the "flea market" mentality of the world's stock markets also exists with these trade-able commodities. For example, a third world country (many are active buyers) might need carbon credits more than a company in Indiana. The government may offer a higher price for the measurable carbon credits for sale.

Tips & Warnings

  • Individuals, using common sense applications (fluorescent fixtures, energy saving appliances, fuel conservation, etc.) create mini-carbon credits.
  • Contact respected organizations in one's country to receive the most acceptable carbon credit measurement and value.
  • Don't assume carbon credits should be sold as the benefits to the creating company may be even more valuable.
  • Simple "abstinence" via using less power or planting trees may not qualify for carbon credit recognition.

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