Carbon Credits Good For Farmers
As nations put more pressure on large companies to reduce their emissions of carbon dioxide, many are turning to a new financial market – the carbon credit. A carbon credit is a permit to emit one metric ton of greenhouse gases (CO2, CO2e, and other gases such as methane or nitrous oxide) for a specific period of time. Companies can purchase these credits to offset their own emissions, or they can use them to make up for a deficit in meeting their emission reduction goals. These credits are created when specific projects work to reduce or remove greenhouse gas quantities from the atmosphere, such as developing clean energy projects or capturing methane from farms or landfills.
There are two types of carbon markets: compliance and voluntary. In the compliance market, governments regulate how much pollution a company can release by creating a cap and trade system. If a company wants to exceed their allowance, they must purchase additional credits to meet their emissions goal. Companies can also buy carbon.credit to offset their emissions in the voluntary market, which isn’t regulated by anyone.
The main difference between the two carbon markets is that companies in the compliance market must purchase carbon credits to meet their emissions targets, while companies in the voluntary market are doing so out of a desire to be environmentally conscious and do their part to combat climate change. However, there are some similarities between the two markets as well. Companies that participate in the voluntary market are usually doing so to show their customers and investors that they take climate change seriously. This is an important component of corporate social responsibility (CSR).
Are Carbon Credits Good For Farmers?
Farmers who are interested in entering the carbon marketplace should consider all options carefully before committing to a program. They should find out what practices the company is willing to pay for and how long their contracts are. For example, there may be a limit on the number of years that a farmer can receive payments for a practice and how often they will need to report data or provide soil samples.
Another consideration is how a farmer will verify their carbon credits. The quality of carbon credits is largely dependent on how carefully they are verified. The more rigorous the verification process, the more likely buyers will be to purchase them.
Verification can include a number of different steps, including the creation and monitoring of carbon sequestration sites and the development of a transparent carbon registry system. Verra, a Washington-based nonprofit group formed by business leaders to improve carbon credit quality assurance, has set the most widely used standard for verifying carbon credits, called the Verified Carbon Standard.
While selling carbon credits can be a lucrative venture for farmers, it can also be a costly one if the verification process isn’t done properly. If farmers have any doubts about a carbon project, they should contact the aggregator or the company to discuss their concerns.
