The notion that carbon credits don't help reduce emissions, as implied by headlines such as that below (from a Wall Street Journal article*), only serves to obscure the amazing work carbon credit programs can do.
It's the case. But, the tiny voluntary tax that's carbon credits has not been a significant influence on the behavior many major emitters, particularly contrasted to the profit made from producing fossil fuels. It's possible that the use of cheaper renewable sources of energy will in time result in greater impact than taxing carbon emissions.
The emissions we produce today pose a challenge. However, to fully appreciate the importance and value of carbon credits, it's crucial to look beyond the Income Statement. Instead, we should be looking at our Balance Sheet. More specifically, our long-term carbon debt.
If Planet Earth were to maintain a Balance Sheet, and we were to list in our Asset column our basic needs: physical security, food security, water supply, etc... as well as also in our Long Team Debt entries the amounts of greenhouse gas as well as the extreme levels of organic carbon in soil loss from our farms and the staggering levels of degradation of the best carbon storage zones - the coastal mangrove forests It is evident from any analysis of that balance sheet that our current situation is not the result of just one year's emissions: if the balance sheet of a business were to reflect this report, insolvency would be on the table.
That is why I think any headline that mentions offsets of carbon or reductions in emissions is misleading. The issues we're experiencing with climate change aren't just caused by carbon emissions. It can also be the result of years (centuries) of inefficient farming practices. Click here for more info of poor agricultural practices, a flurry of deforestation, mangrove removal , pollution, and a variety of other sins.
What is the extent of the damage to mangrove forests? About 50% to 65% worldwide's mangrove forests are gone, or significantly destroyed. Many farmlands around the globe have lost as much as 80 percent of their soil organic matter up to the point that food security is in danger.
It is time to change our perspective away from the "triple bottom line" and instead focus on the accumulation of balance sheet debt. Think of carbon credits more of an item of balance sheet adjustments relating to total debt instead of a tax on current emissions. A credit (carbon) which can be used to reduce the amount of (carbon debt.
How can we cut down our credit?
These answers are quite simple. Here is an illustration. CarbonNation's family of funds has established the CarbonNation Blue fund to help restore and preserve mangroves. These forests need significant funds to be able to scale them up - a 15,000 hectare forest that must be replanted will require between USD2,500 and USD4,500 for each hectare of investment, as well as three years of careful cultivation by local communities.
Additionally, the local onshore fisheries need to be provided with better techniques for removing algae to ensure that phosphorus and nitrogen can be eliminated from the waters and the produce is enhanced.
As the forest grows, the alga plants are operational carbon credits will be created. These can be used to pay back the principal amount and return the investment to investors. The community is also the primary beneficiary of the first stage of investment. The upside is more than simply financial gains. More mangrove cover equates to a commensurate amount more fish (fish reproduce in mangroves as it keeps them safe from predators) which is one of the primary sources of income for many coastal communities.
Greater protection against rising tides, coastal erosion is possible with the presence of mangroves. Many people know mangroves have a 50x higher carbon sequestration rate than low density forests. Yes, machines pulling carbon from the atmosphere and the storage underground is impressively futuristic-looking - but mangroves have been doing it for millions of years, and also providing us with food for the same period of time.
The Fund has received significant funding and partnerships for its work. Partners are encouraged to connect.
*This article is actually very researched and well-written. My issue is with the negative and slightly misleading tone of its headline, that, in light of the content of the piece, I believe could be added or altered by the editor rather than the journalist.