UK Carbon Credits Explained

UK Carbon Credit Offsetting Explained

Carbon credit is a new currency that allows companies and individuals to offset their carbon emissions by paying someone in another part of the world to reduce their carbon dioxide output into the atmosphere. Each carbon credit is worth one tone of carbon dioxide saved from entering into the atmosphere. Each credit is valued in grams or kilograms to match the amount of pollution created by the activities being offset.

Companies in the UK are legally obliged to meet carbon emission restrictions, and it is likely that individuals will soon be accountable for their pollution as well. Someone is considered "carbon neutral" when they are not impacting the environment with carbon emissions. Projects that create carbon credits include providing new sources of renewable energy, improving energy efficiency, and restoring forests around the world. Air travel is the fastest growing source of carbon emissions and is a main target of offsetting.

Many types of activities can generate carbon offsets. Renewable energy such as the wind farms, installations of solar panels, small hydro turbines, geothermal energy, and biomass energy can all create carbon offsets by displacing fossil fuels. Other types of offsets available for sale on the market include those resulting from energy efficiency projects, methane capture from landfills or livestock, destruction of potent greenhouse gases such as halocarbons, and carbon sequestration projects (such as reforestation) that absorb carbon dioxide from the atmosphere.

In modern life, it is almost impossible to be completely carbon neutral - watching television, cooking food, even using a telephone, all directly or indirectly produce carbon emissions (in UK, half of the emissions produced is generated by the industry rather than directly from personal activity). Offsetting has a part to play in addressing this. However, it is a final step in shrinking the footprint path. Offsetting can supplement other efforts and provide short term means of reducing the impact of carbon emissions. By putting a price to the environmental impact of our activities, it also helps build an appreciation of the scale of that impact.