Basic Offset Purchasing Questions  

Q.    How do I know how much I need to buy?

A. The first step would be to decide the scope of what you are offsetting. For example this may be an event, a trip, an activity, and organisation, a product or a service. Once you are clear on what it is you want to offset, you should use calculators that are based upon DEFRAUK Government Department for Environment, Food and Rural Affairs. For more information see here., NGA or GHG ProtocolThe Greenhouse Gas Protocol. The GHG Protocol is an international accounting tool for government and business to understand, quantify, and manage greenhouse gas emissions. It has been developed by a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) and provides an internationally accepted accounting framework for GHG standards and programs, as well as inventories prepared by individual companies. values. If you are using calculators that provide more specific emissions value calculations, check that these follow a clear methodology.

Q.     Why do different emission calculators issue different results?

A. Calculators will vary depending on the amount of information you give them. For example, calculating airline emissions often varies between different values because a wide variety of information is needed to calculate CO₂ emissions on a per person basis. The variation in the results of different calculators has been interpreted as a lack of rigor in the calculation of air travel and undermines carbon offsetting as an approach to fight climate change. Stockholm Environment Institute (SEI) recently examined the key factors that have to be taken into account when calculating air travel emissions for the purpose of carbon offsetting. These factors include: type of aircraft, flight profile, flight distance, cargo on passenger flights, seat occupancy rate, seat class, and radiative forcing index. For more detailed discussion, please see Airline Calculator Issues. 

Q.    Why do offsets vary in cost?

A.    The price of a tonne of carbon offset may vary according to project type and the costs involved in creating and administering it. Better projects can have higher prices but price alone is not a guide to project quality. Certified Emission ReductionsCertified Emission Reductions are credits generated under Kyoto's CDM. One CER unit is equivalent to the reduction of one metric tonne of CO2e. They are designed to be used by industrialised countries to count towards meeting their Kyoto targets. They can also be used as part of domestic targets, for example EU companies and governments use them as offsets against their emissions under the EU Emissions Trading Scheme. (CERs) operate like stocks and shares and their prices can vary daily

Q.     How do I decide which offsets to buy when there is so much variation and choice?

A.     Buying offsets is like buying any product, whereby you are given a wide range of choices for the same outcome (one tonne of carbon offset). Your personal or organisational values or preferences should be used to determine the type or location of the project you choose.

The certification of an offset to an internationally recognised standard will address issues of quality by assuring that ‘a tonne is a tonne’ of carbon being offset. This is the bottom line and the rest of the decisions around buying offsets are personal. If the product has been certified to an internationally recognised standard you should be assured of the environmental outcome of neutralising one tonne of carbon.

Some projects (and therefore the offsets available from them) have other co-benefits that might influence your choice of offset purchase. Such considerations might be whether a project contributes to the sustainable development of its country of origin (renewable energy or social sustainability); the creation of habitat for local flora and fauna (biodiverse plantings for sequestration purposes or improvement in soil health from soil sequestration or avoided deforestation). Gold StandardA certification standard for carbon offset projects. Initiated by WWF, SSN and Helio International, the Gold Standard for CDM projects was launched in 2003 after wide-ranging stakeholder consultation among key actors of the carbon market as well as governments. For more information see here. projects, for example, will ensure that there are wider social and economic benefits from a project in addition to carbon saving.

Q.     How do I determine a reputable offset provider?

A.     An offset provider should be able to address all your queries and concerns regarding the detail and quality of offset and the project it has originated from. They should also be transparent about the process they have for retiring offsets. One way to be certain that the offsets you have purchased are actually retired without receiving the title and checking the serial number as retired on a publicly available registry, is to ensure that the organisation (provider) has independent, third party verification. This process proves that all offsets sold by the organisation have been retired. Like other businesses, this should occur annually.

Q.     Does the location of the project matter?

A.     The location of the project is a matter of preference. Projects from the developing world are enabled under various internationally recognised standards. This allows avoided emission credits from such projects to be used in developed world emissions reductionA measurable reduction in the level of greenhouse gases being emitted by a country, state, organisation or individual. programs. The location of a project does not determine its quality, however it is important that such projects have been accredited according to an internationally recognised standard (for example, Certified Emission Reductions, or CER’s under the CDMClean Development Mechanism is a Kyoto Protocol mechanism under which projects set up in developing countries to reduce GHGs generate tradeable credits called CERs. The credits can be used by industrialised nations to help meet their Kyoto reduction targets. Find out more here. or Voluntary Carbon Units, or VCU’s under the Voluntary Carbon StandardThe VCS Program includes the standard (VCS 2007) and the Program Guidelines 2007. The VCS Program provides a new global standard and criteria for validating, measuring, and monitoring voluntary carbon offset projects. For more information, see here.) to ensure their quality.

Direct Offset Project Questions - Information for Landholders

Q.     I have heard that there may be opportunities for farmers and private landholders to develop carbon offset projects on private land.

A. The National Carbon Offset Standard (NCOSNational Carbon Offset Standard. The National Carbon Offset Standard was released by the Commonwealth Government in November 2009, to come into effect on 1 July 2010 coinciding with the cessation of the Government’s Greenhouse Friendly program. It is intended to ensure that consumers have confidence in the voluntary carbon offset market and the integrity of the carbon offset and carbon neutral products they purchase. It provides guidance to businesses who wish to make their organisation carbon neutral or develop carbon neutral products in a way that achieves emissions reductions, through the purchase and retirement of carbon offsets that are beyond those achieved by the CPRS and achievement of Australia’s national emissions reduction targets.) is effective as a (voluntary not mandatory) standard from 1st July 2010. Section 3.2 Generation of domestic offsets states:

Proponents may propose methodologies for offset projects and develop offset projects within Australia from emissions sources not counted toward Australia’s obligations under the Kyoto ProtocolAn international agreement linked to the UNFCCC and sharing its aim of stabilising atmospheric concentrations of greenhouse gases, but requiring separate ratification by governments. The Kyoto Protocol, among other things, sets binding targets for the reduction of greenhouse-gas emissions by industrialized countries. It entered into force for ratifying countries in February 2006 and commits developed nations to collectively cut their greenhouse gas emissions by 5.2 per cent of 1990 levels by 2012. Came into force in Australia on 11 March 2008. target. 

Emissions sources currently not counted toward Australia’s obligations under the Kyoto Protocol target and eligible for the generation of domestic offsets under the standard are:
•    Forest management (forests established before 1990);
•    Revegetation (establishment of woody biomassBiomass is non-fossilized and organic biodegradable material that can be used as fuel or for industrial production. Most commonly, biomass refers to plant matter grown for use as Biofuels, but it also includes plant or animal matter used for production of fibres, chemicals or heat. Biomass may also include biodegradable wastes that can be burnt as fuel. that does not meet forest criteria); and
•    Cropland and grazing land management (net greenhouse gas emissions from soil, crops and vegetation).

Emission sources not counted toward our international target will be subject to outcomes in international negotiations and, similar to domestic arrangements, are likely to change over time.

Developing methodologies in these potential areas of the voluntary carbon offset market is generally done by private enterprise. This may be too much to contemplate for an individual private landholder. You are best advised to speak with the National Carbon Offset Standard administration for advice in this regard.

Another optionIn finance, an option is a contract between a buyer and a seller that gives the buyer the right—but not the obligation—to buy or to sell offsets at a later day at an agreed price. In return for granting the option, the seller collects a payment from the buyer. A call option gives the buyer the right to buy the offset / credit; a put option gives the buyer of the option the right to sell the offset / credit. is to search the Carbon Offset Guide for providers who have approved methodology for the generation of domestic offset under NCOS and aggregate private landholders to extend the reach of their carbon offset programs and projects. In this instance it is important to be assured that their intended methodology is approved under either NCOS or CPRS and that you seek legal advice on any contractual arrangements.
The National Carbon Offset Standard will also provide guidance on other issues of quality such as permanence, leakageIn relation to carbon offsets, leakage is the direct or indirect increase in GHG emissions from a greenhouse gas reduction project, which is also measurable and attributable to the project., double countingDouble counting can happen when two or more businesses claim the same emissions reduction. This can happen if an offset is sold to two or more entities, or when an entity upstream of the project unknowingly claims the reduction as its own. The establishment of protocols, and the use of an offsets registry can ensure offsets are adequately accounted for., timing of emissions reductions and co-benefits. For more information click here.

Q.     I have 1000 acres of cleared land. Is it possible to plant trees on a portion of it to create carbon credits? If so, how do I do this?

A. It may be possible to entertain the project you imagine on your land however there is a lot to consider!

Recent policy changes affect the extent to which tree planting (sequestration) projects will be recognised in the voluntary carbon market. The National Carbon Offset Standard (NCOS), effective 1st July 2010, says that “Offsets generated from emissions sources in Australia not counted toward Australia’s Kyoto Protocol target, where they meet eligibility criteria and use a methodology that has been approved under the Standard.” will be eligible to create abatementA reduction in the amount or intensity of greenhouse gas emissions as a result of actions taken by a company or individual. under NCOS. However, in practice, it is likely to be quite difficult to comply with the NCOS requirements and gain national accreditation. For more information click here.

Q.     What is soil carbon sequestration and why is it being considered to create carbon credits in the National Carbon Offset Standard (August 2010)?

A. Soil Organic Carbon (SOC) refers to the carbon in soils associated with the products of living organisms. It is a heterogenous mixture of simple and complex organic carbon compounds which can be divided into different pools which serve different functions to soil ecosystems.

SOC is of fundamental importance to soil health/fertility and therefore to sustainable agriculture as it affects all three aspects of soil fertility, namely chemical, physical and biological fertility.

SOC is part of the global carbon cycleCarbon, in various forms, continuously circulates between the living world, the atmosphere, oceans and the Earth's crust. There are many different processes by which carbon is exchanged between these locations, which are collectively referred to as the carbon cycle. and the global SOC pool (1580 Giga-tonnes) is twice as large as that in the atmosphere and nearly three times that of the vegetation biomass carbon pool. SOC sequestration refers to the storage of carbon in soil and is being considered as a strategy for mitigating climate change. Globally, as well as, for some individual countries, it has been estimated that SOC sequestration has the potential to mitigate 5-14% of total annual greenhouse gas emissions for the next 50-100 years.  However, whether this potential is achieved depends on economic, social and political factors.
For further information click here.

Q.     I am investigating opportunities for converting my land practices to be more sustainable. If in that process I improve the soil quality on my farm, is there opportunity to create carbon credits from the soil sequestration on my property?

A. There are significant opportunities for landholders to manage properties to reduce net emissions. Strategic placement of trees, farming practices that build soil carbon, increased efficiency of animal production and nitrogen utilisation of plants will all contribute to climate change mitigation and enhance long term profitability of agriculture.
Measuring this mitigation in a consistent methodology and quantifying it as potential carbon credits is a slowly developing body of knowledge that is currently growing in the hands of universities, scientists and land holder trials. There are many research projects underway to inform your question by our CSIRO and global scientists but it may be some time before their work bears fruit for landholders.

The answer to your question is driven by policy.  There are two recently published documents that explain your opportunities in this area. Firstly, the recent introduction of the National Carbon Offset Standard (NCOS), a stand alone policy document that guides and promotes voluntary action on climate change in areas that are additional to Australia’s international commitments.

Secondly, the Carbon Pollution Reduction SchemeAustralia's cap and trade scheme which will come in to effect in 2010. The CPRS will place a limit, or cap, on the amount of carbon pollution industry can emit and allow trading of carbon credits. It will concentrate on the biggest polluters, by placing obligations on around 1000 Australian companies in total. However it will effect all Australians through indirect price increases. (CPRS) when it passed in Parliament, proposes that agricultural soils (grazing and crop land management), including biosequestration through soil carbon and biochar are to be recognized as legitimate potential ways to create voluntary abatement that are not counted towards Australia’s international commitments and may therefore be additional.
Methodologies developed on strong scientific quantifiable and programmatic research foundation should be submitted for approval to the National Carbon Offset Standard administrator from 1st July 2010.

Q.     I am a landowner with 1000 acres, of which 80 % is heavily treed. We run no stock and do no farming at all. I am enquiring about the possible sale of the carbon credits of the property.

A. The carbon in the trees you currently own cannot be claimed or sold as a carbon offset for another persons polluting activities. To be regarded as a valid offset, a project must be proven to be ‘additional’ to what would have occurred anyway. Additionality is a key concept in evaluating whether or not an offset project leads to real and measurable greenhouse gas reductions.

Q.     What if my revegetation project does not fit the criteria of National Carbon Offset Standard (NCOS)?

A. If your project does not meet the criteria for revegetation under the National Carbon Offset Standard (NCOS) it may be considered under the Carbon Pollution Reduction Scheme, however, there is little certainty to go by on this piece of legislation passing through Parliament at this time.

Revegetation ‘forests’ are intended to be dealt with under the CPRS legislation. To create offsets under this scheme you must ‘opt in’ to the CPRS to qualify to create permits. These permits could be sold within the scheme as compliance permits to liable parties or in the voluntary carbon offset market.  

 

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For more information please go to the EPA website:
http://www.epa.vic.gov.au/climate-change/carbon-offsets/default.asp#faq