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Types of Carbon Offsets and Their Benefits

By powerwizard

Climate-related legislations and policy changes are increasing around the world. As you think of greener and cleaner ways to live and avoid litigation, you may want to consider carbon offsets. But what are carbon offsets in the first place?

These refer to eco-friendly or technological projects you can invest in to balance out your carbon footprint. The carbon offset initiatives are present in developing countries all over the globe. They are designed to lower your future greenhouse gas (GHG) emissions.

Learn more about the different types of carbon offsets and their benefits in this article. At Power Wizard, we aim to help you make informed energy decisions with the best information and tools.

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How the Different Types of Carbon Offsets Reduce Your Carbon Footprint

Carbon offsets can vary from schemes that directly soak up carbon dioxide from the environment to using clean, renewable energy sources. Below is an in-depth look into carbon offsets you can participate.

Turning Waste to Energy

Waste management and diversion is a carbon offset project that aims to keep commercial and household waste from squandering away in landfills. Municipal solid-waste landfills are the 3rd largest contributor to human-related carbon emissions without accounting for commercial waste.

When organic waste materials like corn husks and fruit peels start decaying anaerobically, they produce methane gas. This carbon compound is a 25 times more potent greenhouse gas than carbon dioxide. One of the best ways of utilizing organic refuse involves capturing biomethane or biogas and converting it into clean electrical energy. Carbon offsetting helps give rise to a sustainable energy source while reducing your carbon footprint on the environment.

Forest Preservation and Conservation

Tree planting is a classic natural solution to reducing your carbon dioxide (CO2) emissions. Trees literally suck carbon from the atmosphere through their branches and leaves to use it as a raw material in photosynthesis. You can play your part in forest preservation and conservation by enrolling in a forestry program.

Afforestation entails planting these natural carbon solutions where no tree initially existed. If you choose this option, consider paying attention to biodiversity. Having different tree species protects your budding forest from falling victim to diseases. Also, avoid invasive tree species that may damage the existing ecosystem.

Reforestation is another effective forestry program that can help combat climate change. The earth loses about 200,000 acres of forest cover to deforestation daily. When you burn the wood, the lost bionetwork releases a lot of carbon dioxide it once absorbed. Reforestation initiatives help balance the forest cover destruction. They restore the crucial ecosystem by replacing the trees you cut down.

You can also choose to avoid deforestation, which prevents extra carbon emissions. In addition to saving trees holding CO2, you also safeguard the homes of numerous creatures. Some carbon offset initiatives lease or buy forested areas to prevent the landowners from cutting down the forest cover.

Renewable Energy

Green energy options are renewable when they replenish on a human time scale and are unlikely to run out. Fuel switching to clean energy sources reduces dependency on fossil fuels like natural gas, coal, and petroleum products. Using renewable energy certificates (RECs) or green tags, you can identify a renewable energy provider.

These certificates warrant that the bearer generates 1 MWh of electricity from a renewable resource. The energy provider receives a REC after feeding the output into the grid and can trade the nontangible item as a commodity on the open market. It functions as the carbon credit seen in carbon offset programs.

Here are the three sources of renewable energy you can harness:

  • The sun is an abundant source of renewable solar energy that you can harness using solar photovoltaic cells. The PV cells convert solar particles or photons into electricity that you store in a battery. A group of arranged photovoltaic cells gives you a rooftop solar panel that produces enough solar power for your home.
  • You can also harness wind power in an expansive area where the wind blows regularly and fast. Wind turbines convert the renewable kinetic energy of wind into electricity. The longer the wind blows, the more the amount of electric power you can produce. With increased federal wind energy funding opportunities, there are numerous large-scale energy providers you can opt to connect with in your efforts.
  • Hydroelectric power (HEP) has long been embraced as a viable source of clean energy. The sheer force of moving water provides enough kinetic energy to turn the turbines in HEP plants and produce electricity.

With many renewable energy providers available in today’s energy sector, you may find it daunting to pick one. Power Wizard can help you identify the perfect renewable energy programs for your home using our DIY shopping tool.

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The Benefits of Carbon Offset Projects

Carbon offset benefits are various and often go beyond the obvious. Here are the three key ones that may prompt you to join a carbon offsetting project:

Emission Reduction

Greenhouse gases (GHG) are by-products of human activity that increase the earth’s natural greenhouse effect. GHGs like methane, carbon dioxide, nitrous oxide, and fluorinated gases trap heat in the atmosphere and promote global warming. The rising temperature alters the world’s climate systems, resulting in erratic weather. One of the key benefits of carbon offsets is that they help to reduce, remove, and prevent greenhouse gas emissions to the environment.

Carbon Offset Credits

A carbon credit refers to a tradeable certificate or permit allowing the bearer to emit one ton of CO2 or its equivalent for other forms of GHGs. Government bodies or regulatory authorities use carbon credits as a market mechanism for lowering carbon emissions. They set limits or caps on the amount of carbon you can emit.

Companies that can’t lower their emissions immediately can buy carbon credits to comply with the set cap standards. Entities that meet the carbon offset earn extra carbon credits. You can sell the additional carbon credits to fund future endeavors that reduce your carbon footprint.

The main types of carbon credits include:

  • Certified Emissions Reduction (CER): CERs were created via a regulatory framework to offset a project’s GHG emissions. They have a third-party certifying body, unlike VER.
  • Voluntary Emissions Reduction (VER): VER is a tradeable carbon offset in the voluntary market of over-the-counter credits.

You can trade carbon credits on public or private markets. Prevailing trading rules also permit the international transfer of carbon credits between parties. Their prices fluctuate with changing supply and demand.

While carbon credits can be of great value to society, consider taking up CERs as an excellent investment vehicle. Large financial institutions have set up special carbon funds that sell carbon credits to small investors. They aim to allow you to enter the market.

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Clean Energy

The use of clean, renewable energy is a carbon offset program you can enter with ease. Sunlight, wind, waves, and geothermal heat are green energy options. These energy sources are much more sustainable than fossil fuels, and there have been many initiatives toward their use in the last couple of years. Advances in technology and emerging innovations are expanding the horizons on harnessing clean energy and improving the prospects of a carbon-free future.

What Are the Developmental Impacts of Carbon Reduction Goals?

Carbon offset projects can impact various aspects of life other than reducing carbon emissions. They benefit the environment by enhancing biodiversity, re-establishing and maintaining the natural habitat, and improving the quality of local water and air.

Moreover, communities can benefit culturally and socially from the employment opportunities and capacity building coming from the programs. The sale of carbon offset credits can also finance community projects and push for beneficial technology and infrastructure development.

How You Can Become a Part of a Carbon Offset Program

As energy users have an option to enter many types of carbon offsets these days, selecting one can be difficult. You need to consider the carbon offset quality, the range of projects available, the transparency and adherence, and much more.

If the selection feels too complicated at this point, Power Wizard is ready to assist you in making the right choice and taking that first step toward a carbon-free future. Reach out today and learn how Power Wizard can help you.


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