The voluntary greenhouse gas market

Because the US is not a signatory to the Kyoto Protocol, it is not legally bound by that international accord to reduce its greenhouse gas levels. However, in the absence of federal regulation of greenhouse gas emissions, a rapidly evolving voluntary carbon market has emerged. This market is developing mainly: (1) to help counteract climate change; (2) as a means to earn 'early actor' status or credits for participating entities; (3) in anticipation of future governmental regulation of greenhouse gas emissions; and (4) to set the groundwork for future participation in international markets. This voluntary market is experiencing dynamic growth and is evolving rapidly as more and more individuals and organizations take action to reduce their climate impact.

The number and type of sellers of greenhouse gas offsets in the voluntary market has increased substantially over the past five years. Consumers can now offset their greenhouse gas emission by purchasing credits from projects ranging from light bulb replacement in Africa, to jungle reforestation in Ecuador, to sophisticated retrofits of large manufacturing plants in the US. Some organizations offer credits from only one or two types of projects while others, including The Climate Trust, offer offset credits from a diverse portfolio of projects.

When properly implemented, greenhouse gas offsets are a practical, cost-effective means of addressing climate change. Moreover, they are one of the most accessible and affordable means, after reduced energy consumption, for consumers to mitigate their individual impacts on the climate and to send a message to regulators that global warming is an issue they care enough about to voluntarily spend money on.

However, caution should be exercised when purchasing offsets in the voluntary market. Because a greenhouse gas offset is an intangible commodity that is based on a hypothetical projection of what emission levels would have been in the absence of the project, it is important to ensure that purchased offsets result in a real, verifiable reduction in greenhouse gas emissions. Currently, there is no one standard or certification for the offset credits that are being sold in the voluntary market. Therefore, it is especially important to purchase greenhouse gas offsets from a reputable source. Several standards are currently under development at the national and international levels and should be operational within one to two years. Until that time, consumers should ensure that greenhouse gas offsets meet the minimum principles discussed in the next section of this chapter; Clean Air-Cool Planet (2006) provides useful guidance and ranks several of the top providers in the industry.

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