Of course not. The solutions to climate change will necessarily be political, social and maybe economic. But markets provide an instrument to encourage action once these political and social changes have happened. It is important that this instrument is as effective as possible. It is of course not the only instrument available for the reduction of greenhouse gases and should be used in combination with taxation, regulation and increasing awareness.
Carbon credit vintages refer to the specific year in which the emissions being traded were saved at the project. This is important to prevent double counting and fraudulent claims about being “carbon neutral”.
Credible Carbon projects align with the principles of either the UNFCCC’s CDM, Gold Standard processes for carbon trading, or with UK standards for voluntary projects. All projects result in a quantifiable reduction in greenhouse gas emissions and in poverty. Investors in Credible Carbon projects are provided with real-time information on how the money has been spent and on project progress.
Credible Carbon is an Sputh African company, managed for the benefit of South Africa. All projects registered by Credible Carbon aim to be locally relevant. The benefits of investments in Credible Carbon projects are not haemorrhaged to industrialised countries. This is important in terms of Africa’s exposure to the impacts of climate change. Credible Carbon is usually better-placed to understand the local conditions in South Africa than overseas-based carbon registries and so we can make sure that any carbon offset contributions are invested in credible activities. The nature of Credible Carbon projects is defined by local people and is not dictated to by the need to return shareholder profits or economies of scale.
Credible Carbon encourages all investors to consider ways to reduce their emissions and proposes some easy steps that investors can follow. Investment in renewable technologies in developing countries typically has a far greater impact on emissions reductions than the same investment in industrialised countries, where things are more expensive to change. By investing in renewable energy projects in South Africa, Credible Carbon is assisting South Africa to follow a development path that will not involve the same level of emissions as the development of current industrialised countries. Developing in-country investment in renewable energy places these countries at the forefront of emerging renewable sectors.
Global warming is now accepted as one of the most serious threats to the future of all people on the planet. We must all take urgent action to reduce the amount of greenhouse gases that are currently being produced. The first step is to be more efficient when using energy – cutting down how much energy we use will reduce the amount of greenhouse gas that is emitted. When we can’t easily cut our energy use any more, making a carbon offset contribution will allow Credible Carbon to make carbon savings in Africa that will help to compensate for your carbon emissions.
PACE is registered in South Africa as a “voluntary association” or “Universitas”. The Association is a public, not-for-profit organisation (055-238-NPO). PACE has the support of South Africa’s Designated National Authority (DNA) in the Department of Energy. PACE was established in 2004 with a one year grant funding from the UK Foreign and Commonwealth Office, its mission then was to make small-scale CDM work in Southern Africa. It was mission that led PACE to launch Credible Carbon in 2008 as a separate, legal entity. Credible Carbon is a registered, private company. Its chief aim is to become the most efficient and effective carbon market instrument for southern Africa and to make the market work for poverty alleviation in this region.
PACE is a not-for-profit whose chief job is to act as a project proponent to the Credible Carbon registry. The following objectives are stated in PACE’s constitution and continue to guide the organisation’s intent:
In projects registered with the Credible Carbon registry a minimum of 70% of carbon revenue is returned to the project; that is after registry fees, audit fees, legal costs and project proponent fees have been deducted.
The Credible Carbon registry only sells credits that have been shown to be real, measurable and permanent, and all credits listed in the registry have been audited by independent auditors. The audit process places an emphasis on:
• The project’s existence and track-record (Credible Carbon does not sell credits for planned or undeveloped projects, we only deal with working projects).
• The functioning of the technology or programme responsible for mitigation, energy efficiency or sequestration.
• The plausibility of assumptions made to estimate carbon savings and their grounding in recognized norms.
• A discernible impact on poverty.
For a project to trade through the Credible Carbon registry it must:
• Submit a Project Idea Note (PIN) detailing its operations and estimating the quantum of carbon
• Enter into a Credit Supply Agreement with the registry ensuring exclusive access to the carbon credits for a stipulated period (usually 2 years). This is to prevent credits being “double-sold” through different registries.
• Pass a carbon audit by an independent auditor contracted by the registry.
Only once credits are sold does the project become liable for transaction costs which are deducted from the carbon revenue. Transaction costs are comprised of:
• The audit fee (typically R30 000 – R40 000)
• R3 per ton registry fee
• A once-off fee legal fee of R3 000 to cover the cost of the supply agreement and emissions purchase agreements with clients.
PACE makes itself available to play the role of project proponent should the project require assistance in drawing up a PIN or in preparing for the audit.
Typically a project has to save a minimum of 1 000 tCO2-eq per annum (depending on the sales price achieved) to cover transaction costs and make a profit.
You can choose which of Credible Carbon’s projects you would like to contribute to. Because of our strict pro-poor and real emission reduction stance, the Credible Carbon project portfolio may not be as big as some companies, but this is part of the commitment to being credible. When you have selected a project, you can choose to receive project updates to understand the difference that your investment has made.
Although the Kyoto Protocol First Commitment Period expired at the end of 2012, it was extended to 2020 at the Doha climate change conference in December 2012. The Kyoto Protocol limits to the amount of greenhouse gases that can be emitted by affluent industrialised countries of the world. The Protocol has also established a “Clean Development Mechanism” (CDM) that allows for investment in developing countries. Credible Carbon has a track-record of assisting projects in South Africa with the CDM, but the process is very slow and costly and tends to favour large-scale industrial projects. So Credible Carbon spends most of its time working with voluntary carbon offset contributions, which achieve the reduction in emissions at lower costs and offer greater poverty alleviation potential.
No! The voluntary carbon credits that you purchase from Credible Carbon are not part of the Kyoto Protocol. Rich countries already have targets that they must meet so the emissions reductions from Credible Carbon projects will be additional – these reductions will not happen without extra funding and funding is used to make further reductions. Rather, the Credible Carbon contributions are used to offset business and personal carbon footprints.
For the Kyoto Protocol, industrialised countries have agreed to legally-binding targets for their carbon emissions. Most companies have been given a fixed number of carbon credits that limits the amount of greenhouse gas that they can produce, and will be fined if they exceed this amount. The EU ETS is like a stock exchange for carbon credits. Companies who have spare carbon credits can sell to companies that need credits to avoid a fine – this is done through the EU ETS. But this scheme is only for companies in the EU, so Credible Carbon does not get involved.
Unlike other organisations that work in this area, Credible Carbon maintains an updated record of what projects receive support from the carbon offsets, how the project is developing and what has been achieved. The project baseline (how much greenhouse gas is emitted before the credible carbon investment) is prepared at the start of the project, and verified in an independent audit.
Carbon is often used as an abbreviation for “carbon dioxide” when talking about voluntary offsets. But this is not necessarily the case when talking about other climate change issues such as carbon trading, or carbon footprints. In this case, carbon is referring to any greenhouse gases (GHGs) that contribute to climate change. The most common GHG is carbon dioxide, and this is the one that most of us can do something about since it results from using gas or coal (which often generates electricity). Carbon dioxide is also the basis of the standard unit of measurement for emissions – the carbon impact of all other gases is converted into the equivalent amount of carbon dioxide that would have the same effect. Most of our credible carbon projects involve energy efficiency (saving carbon dioxide) or renewable energy (avoiding carbon dioxide). But there are some that target other greenhouse gases, and the effect of these is converted into carbon dioxide equivalent in order to find the value of carbon offsets.
The carbon calculator on the Credible Carbon website will give you the amount of carbon that is emitted by your current activities at home, during personal travel, in your office building or for business visits. To work out this figure, Credible Carbon usually uses publicly available figures that convert energy use from different fuel sources into CO2 emissions. The only major exception is for electricity use, where the conversion rate differs depending on the composition of energy supplying the energy grid in specific countries. For large projects traded by Credible Carbon independent auditors are used to verify carbon savings.
The price of a carbon offset is based on the cost of reducing an equivalent amount of carbon in a given project – the “marginal abatement cost”. The cost of reducing a unit of carbon will differ across projects depending on their specific activities. In general Credible Carbon seeks projects that have a significant impact on poverty and emissions at a reasonable cost.
Credible Carbon acknowledges its need to be cost-competitive relative to the global emissions reduction market, but has concerns about the impact of expedient large-scale industrial projects on the global carbon price – a concern that is shared by the World Bank, DFID, WWF and clearly articulated in the Stern Review (2006).
Credible Carbon pledges not to compromise the quality of its projects or the credibility of its off-sets by pursuing dubious, cheap off-sets.