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Tag: carbon tax

  • How to Choose Carbon Credits That Actually Cut Emissions | Entrepreneur

    How to Choose Carbon Credits That Actually Cut Emissions | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Across industries, businesses are taking drastic action to minimize their environmental impact — from slashing carbon emissions to utilizing recycled materials to minimizing corporate travel. Carbon offsets have become a major tactic for forward-thinking companies looking to meaningfully reduce their climate impact.

    The voluntary carbon market is expected to grow from $2 billion in 2020 to roughly $250 billion by 2050, indicating its immense viability to deliver meaningful climate solutions.

    However, for the industry to achieve its full potential, companies need clarity and transparency in the process of selecting carbon credits. For companies looking to meaningfully reduce their carbon footprint, there can be concern and confusion over picking the “right” credits — those that actually deliver the impact being paid for. The voluntary carbon markets lack clear standards, which can make it challenging for businesses that want to do the right thing to navigate.

    Related: The Carbon Credit Market Could Grow 50X Bigger: How One Pioneering Platform Is Meeting the Demand

    What are carbon credits?

    It’s crucial that companies make major strides in reducing the carbon that they produce. However, there will inevitably come a point when organizations have reduced their total emissions as much as possible. In order to bridge that carbon gap, companies rely on carbon credits — which represent the removal or protection of carbon by others.

    Companies purchase carbon credits from projects that draw down legacy carbon trapped in the atmosphere and protect existing stores of carbon from being released – both of which are needed to reverse the climate crisis.

    For instance, the crops of the globe’s two billion smallholder farmers naturally pull down carbon from the atmosphere, storing it back in the soil. Using sensors, satellite imagery, AI and regular monitoring, this stored carbon can be tracked and quantified then sold as a carbon credit.

    Most companies purchase carbon credits via the voluntary carbon markets, which are fast-emerging as a vital tool to help companies achieve their climate targets. While these carbon credits are a proven tool for offsetting emissions, there are a multitude of options that vary in quality and impact.

    Why carbon credits?

    Risk is the biggest driver in business and — with trillions of dollars in annual climate-related costs and damage – the climate crisis is fast becoming a business crisis. Corporations must act now to minimize losses, illustrate meaningful climate action to shareholders and comply with fast-approaching climate regulations.

    Carbon credits are an important approach to scaling climate action globally and are a fast-growing strategy for delivering on corporate ESG goals. While these offsets are part of nearly every scenario that keeps global warming to 1.5 degrees Celsius, legacy carbon markets lack broad public trust: Impactful carbon solutions require clear guidelines and proven, verifiable data.

    Delivering transparency via data

    In selecting carbon credits, consider the data:

    • What kind of data is provided — Is it clear who is responsible for carbon sequestration (i.e., smallholder farmers), and how they’re doing it (i.e., through the crops of their regenerative farms?
    • How is carbon removal calculated?
    • Who is verifying the data — Is it a third-party entity?
    • Is the carbon data auditable (this is especially important for public companies in light of fast-approaching SEC climate disclosure rules)?

    Businesses need auditable, transparent climate and social impact data to convey their actions to key shareholders.

    Without transparency about where carbon comes from, the positive and negative impacts of how it’s being captured and stored, and how it’s being calculated, there is a tremendous corporate risk for faulty carbon credits.

    Investors should turn to carbon credits that allow them to track the sourcing of their credits back to the specific farm and community they came from, and that robustly quantify how those communities are benefiting from the carbon markets.

    Climate justice: Merging social and environmental impact

    While legacy carbon markets rarely have focused on socio-economic impacts, the burgeoning generation of carbon markets will prioritize both social and environmental impact in their models. In action, these carbon credits will benefit the environment while equitably compensating those responsible for the carbon sequestration. Often, these carbon stewards are among the most vulnerable populations – including smallholder farmers, women and indigenous communities.

    When buying carbon credits, ensure that carbon stewards are equitably compensated by asking some basic questions of those selling carbon credits:

    • What language do they use to discuss the partnership with carbon stewards?
    • Is their data auditable?
    • Is the financial model of carbon credits disclosed? Are carbon stewards paid equitably and in a timely manner?
    • Is socioeconomic improvement data shared with investors according to accepted third-party standards?

    Incorporating social and environmental impacts into the next generation of carbon markets can further enhance their value, potentially benefiting vulnerable communities that play a key role in carbon sequestration. A well-designed carbon credit protocol can financially incentivize carbon stewards to bolster their future work – which increases the positive socio-economic and environmental impacts for generations to come.

    Other tactics for carbon removal

    Mechanical carbon capture comes in the form of big machines that effectively suck carbon dioxide out of the air to store, either by putting it underground or repurposing it in other ways. While mechanical carbon capture is promising, this technology is largely still in its infancy, enormously expensive, and still proving its ability to scale.

    Related: Blockchain Could Help Us Combat Climate Change — Here’s How.

    The time is now

    Forecasts now show that the planet will hit a threshold of 1.5C in global temperature change by 2027, which is far sooner than ever expected and carries the potential for massive damage, loss of human life and trillions of dollars in incurred damages for the global economy.

    This is an all-hands-on-deck moment. We must engage proven, reliable, and equitable methods to meet what may be the greatest threat to the future of humanity and the planet we inhabit. Carbon credits, when implemented responsibly and at scale, can be a very effective tool for humanity to use in the fight to limit the damages from climate change. However, the industry’s growth hinges on increasing transparency and standardization to ensure that carbon credits truly deliver the promised impact.

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    Josh Knauer

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  • Blockchain Could Help Us Combat Climate Change — Here’s How. | Entrepreneur

    Blockchain Could Help Us Combat Climate Change — Here’s How. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    90% of corporations now view sustainability as a crucial part of their organization’s strategy. But turning recognition of the importance of sustainability into concrete action is often easier said than done. Notably, only 60% of organizations actually have a sustainability strategy in place — representing a 30% gap between the number that view this as important and the number that are actually taking action.

    As part of the effort to get more companies to adopt eco-conscious initiatives, carbon credits have become an increasingly important part of the modern sustainability narrative. But challenges to the effective adoption and use of carbon credits remain. However, with digital carbon spurring a new wave of green entrepreneurship, this is poised to change.

    Read on to learn more about digital carbon credits and how they could potentially play a role in your own efforts to go green.

    Related: Digital Ads Are Fueling a Climate Disaster. Take These Steps to Offset The Industry’s Hidden Toll on Our Planet.

    So, what are carbon credits?

    First, it’s important to understand what carbon credits are and what their role looks like in the current corporate environment. Carbon credits are designed to offset the greenhouse gas emissions of corporations and nations.

    There are two main types of carbon credits. The first is often referred to as a “permit to pollute” or “regulatory compliance credits,” in which a company essentially buys carbon credits equivalent to the amount that they went over the allowed rate. As Investopedia explains, companies are granted a specific number of credits, with each credit allowing for the emission of one ton of carbon dioxide.

    These credits are designed to decline over time, and companies can sell or trade their excess credits. Essentially, the idea is that having credits to “cap” carbon emissions will create a financial incentive for businesses to lower their emissions.

    For example, a country might require companies to limit their greenhouse emissions to 50,000 tons per year. A business that previously produced 70,000 tons of emissions per year must either buy carbon credits or find a way to lower its emissions. Even for smaller businesses, these guidelines can serve as a good way to consider how you can lower your emissions over time.

    The other type of credit (known as “voluntary offset credits”) is obtained when a company offsets its own emissions through its voluntary participation in an environmental project. An organization that invests in a project in areas such as renewable energy or forestry can then obtain carbon offset credits as a way of quantifying their environmental impact.

    Related: Sustainability In Business: Why Change Is Needed Now

    How digital carbon enhances the existing carbon credit market

    Currently, the standard market for creating, selling and trading carbon credits leaves a lot of room for interpretation. “Permit to pollute” credits are government issued — but in many parts of the world, participation in these carbon credit exchanges is relatively limited.

    For example, the United States only has two state-based emissions trading programs. These are the Regional Greenhouse Gas Initiative (RGGI), which is limited to power sector emissions in several Northeastern states, and California’s AB-32 Cap-and-Trade Program.

    Because of this, most businesses only participate in the carbon offsets voluntary market — obtaining carbon credits by investing in sustainability projects. However, offset credits aren’t regulated by the government, which can create challenges for selling, trading and verifying carbon offsets. How can your business manage carbon credits effectively without a clear system in place?

    This is where digital carbon can help level the playing field, improving accessibility and streamlining processes. As a report from Changeblock reveals, digital carbon offers digital credits representing proportional ownership of climate-backed tokens. A central digital platform enables these tokens to be gathered as a single asset that is easily traded. Rather than needing to buy individual tokens from different sellers or marketplaces, digital carbon credits can represent one ton’s worth of emissions from several offsetting projects.

    With blockchain management, each digital carbon credit comes with a comprehensive data packet detailing the transaction. This includes details on emissions reductions quantity and pricing. In some cases, it could even provide transparent access to raw data from sensors such as gas chromatography devices, scales, pressure monitoring systems and more to verify the amount of carbon offset associated with each digital credit.

    This actionable insight and the accessibility of a digital platform help bring offset carbon credits to a significantly broader audience, incentivizing more organizations and individuals to participate in climate change initiatives. Digital carbon credits open up this concept to the masses — so even if you’re “too small” for a traditional carbon credit program, you can still access digital credits.

    Key advantages of digital carbon

    Digital carbon offers several noteworthy benefits that, when properly implemented, allow carbon credits to become more effective in driving the transition to a global net-zero economy.

    By using a digital platform as a central location for tracking and trading carbon credits, these processes will naturally become more efficient and transparent. For organizations that are seeking to sell, trade or verify their carbon credits, this provides a much-needed layer of trust in what is still a largely unregulated industry.

    A digital platform also enhances the potential for organizations to offset emissions on a global scale by being able to support and gain carbon credits for sustainability projects anywhere. This also makes carbon credits more easily accessible to individuals and organizations that might not have the capabilities to undertake carbon reduction projects on their own. For example, you could partner with another sustainability organization, donating whatever money or resources you can, rather than needing to spearhead a sustainability project on your own.

    In many ways, digital carbon is set to support a significant expansion in new sustainability-focused partnerships worldwide by making it easier for companies of all sizes to invest in environmental projects of varied scope and focus.

    Related: 3 Ways You Can Bring Sustainability to Your Workplace

    Creating the future of sustainability

    Demand for carbon credits is only expected to increase in the coming years. As businesses and governments seek to curb their impact on the environment, the ability to effectively create, track and trade carbon and other environmental credits will become even more important.

    With the growing wave of digital carbon initiatives, much-needed transparency and efficiency can make these efforts more effective than ever before. As you consider how your own business can become more environmentally friendly, don’t overlook the potential value of digital carbon.

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    Lucas Miller

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  • Digital Ads Are Destroying Our Planet and We Need to Act Now.

    Digital Ads Are Destroying Our Planet and We Need to Act Now.

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    Opinions expressed by Entrepreneur contributors are their own.

    The average consumer may not realize how much power goes into placing the targeted ad they see online every day. So for many, the hidden impact of digital advertising may come as a surprise: Digital advertising has a massive carbon footprint. A typical digital-ad campaign for a single brand can produce hundreds of tons of carbon dioxide. In the U.K., for example, an average digital ad campaign emits over 5.4 tons of CO2. To put that number in perspective, this accounts for one-half of one consumer’s annual emissions in the U.K. and over one-third of carbon emissions from fossil fuel per capita in the U.S.

    The world is failing to reach the Paris Agreement’s target to limit the rise of global warming to 1.5 degrees Celsius in a multitude of ways, so you might be wondering: Why do we need to pay special attention to the amount of CO2 emissions contributed by online advertising specifically? Well, one reason seems obvious: such emissions often go unacknowledged.

    Like it or not, the global online advertising industry has a massive influence on everyone, making us all part of the problem. Aside from being a powerful driver of our frequently excessive (and wasteful) shopping habits, the mere daily viewing of multiple search ads, banners, interstitials and video pre-rolls, in addition to hundreds of the so-to-speak digital-out-of-home ads (on the streets, in shopping malls and elsewhere) has a massive impact on the global carbon footprint.

    Just think about it: A footprint of one short email is estimated at 0.3 grams of CO2, and this number can grow up to 17g for a longer version, according to Mike Berners-Lee’s research. And how many of those do you get every day? Tens, if not hundreds, and counting.

    And while the jury’s still out on whether we can make online advertising carbon-neutral, this key question remains: What actual steps do we need to take to get closer to this goal?

    But first, let’s define what carbon neutrality actually means.

    What is carbon neutrality?

    To put it simply, carbon neutrality implies the amount of carbon emissions is balanced with the amount of absorbed emissions by natural carbon sinks (e.g. rainforests).

    So to count as a carbon-neutral company, a business needs to demonstrate its amount of emitted greenhouse gasses are being negated by the amount of adsorbed gasses, either by reducing the number of its emissions or by purchasing the so-to-speak carbon offset credits — in other words, permits to emit a specific amount of greenhouse gasses, like CO2.

    Identifying the sources of emissions in the digital ad supply chain

    The first step in reducing digital ad emissions is to identify the main sources of these emissions in the digital ad supply chain. When it comes to online advertising, aside from the travel costs, the key sources of emissions include data transmission, data center and device usage in each of the following:

    • The production of ad creatives — from equipment rental to post-production and crew travel.
    • Programmatic ad transactions — defined as the automated buying and selling of online advertising space — play a huge role in the production of carbon emissions. For example, WPP, the world’s largest investor in media advertising, reports that 55% of its current carbon emissions come from the programmatic supply chain that delivers campaigns on behalf of its clients.
    • Ad targeting and measurement — this includes the selection of audience segments, uploading the audience segment to the advertising platform, and the continuous tracking of ad performance by multiple scripts on websites.
    • The delivery of ads across desktop and mobile web, connected TVs and mobile apps — for instance, streaming a one-minute video on a 50-inch LED TV in the U.S. reportedly results in 0.98g CO2 emissions, whereas watching the same video on one’s smartphone reduces the carbon footprint by almost six times.

    So, what are the possible solutions to reduce digital ad carbon emissions, and who should act on it?

    Advertisers need to drive change

    While every member of the advertising supply chain needs to do their part towards achieving carbon neutrality, brands and media agencies need to take an extra step, specifically in online ad production and media planning areas.

    Namely, the scope of actions may include:

    • The localization of ad production so it’s closer to the team’s location to reduce travel-related carbon emissions.
    • The use of 3D modeling animation instead of video shooting to minimize the CO2 emissions produced by production crew travels and utilized equipment.
    • The production of short video ads, instead of long ones. As a general rule, the shorter the video, the less the file weighs, and the less server load its delivery and streaming require. This, in turn, should result in reduced CO2 emissions by viewers’ devices, data transmission and data centers.
    • A reduction of the size of image ads. Similarly to video ads, the lighter the image file, the fewer CO2 emissions it emits.
    • The upcycling of existing media creatives by tweaking old video and image ads instead of creating new ones to curtail carbon footprint.
    • The delivery of ads during non-peak times in order to balance off-peak server load, which usually requires extra power consumption and results in larger CO2 emissions.

    On a broader scale, making a positive change also implies a shift in the perception of brand safety, that is, adding sustainability benchmarks to the picture.

    First, this involves defining the brand purpose and actually investing in the promotion of carbon-conscious behavior among the company’s customers.

    Second, this means optimizing for or even adding extra incentives for carbon-efficient publishers and ad tech partners (i.e. being willing to pay a higher price for placing ads on carbon-efficient websites, spending more money on carbon-efficient video ad servers, etc.), hence driving the further transformation of the entire ecosystem.

    And third, this requires the maximization of return on CO2 emissions, in addition to ROI. In other words, brands need to strive for the maximum reduction of carbon emissions, while maintaining overall advertising efficiency. For instance, a company may choose to target smartphone users with short video ads (e.g. 5- or 10-second long) instead of longer ones, which happen to perform better in the mobile segment.

    Related: 4 Ways Smart Maps Can Help Your Business Keep Its Social Promises

    But real change cannot be achieved without digital ad consumers

    While the majority of top-tier brands — like the members of the World Association of Advertisers (WFA) — have already made their Planet Pledge, and tech giants such as Microsoft and Google have reaffirmed their sustainability commitments, actual positive change would not be impossible without digital ad consumers.

    Even though most businesses’ carbon-neutrality promises sound ambitious, chances are the reported data is being miscalculated, misrepresented or both. It’s up to us, the consumers to keep them accountable, by doing the following:

    • An analysis of climate pledges that have already been made. You can do this by reviewing the brand’s website and other digital resources to find out which promises on CO2 carbon footprint reduction have already been made.
    • Continuously monitoring progress achieved. For example, check if the brand publishes regular reports on how it has been reducing carbon emissions in the past quarter, year, and so on.
    • Staying alert for the greenwashing red flags. A company that doesn’t share granular data on emissions, or keeps the message brief, like “We’ve cut emissions by half and now we’re carbon-neutral” are all common signs of greenwashing.
    • Being ready to leave, if the expectations haven’t been met. You might find out your favorite brand has been caught lying or misrepresenting its data on CO2 emissions multiple times. Taking a stand by quitting the use of its products or services ensures they’re being held accountable for deceptive and unethical marketing practices.

    Ultimately, it’s up to each of us to make our own carbon-conscious decisions, when it comes to our media perception, ad consumption and our shopping habits. If we don’t, we’ll pay an even greater price.

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    Anton Liaskovskyi

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