Basic Offset Purchasing Questions

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

A. The first step would be to decide what it is you are offsetting. For example this may be an event, a trip, an activity, and organisation, a product or a service. In doing so, you will need to determine what the emission sources and whether those sources are included or excluded. This is called the boundary.

Once you are clear on what it is you want to offset and have identified the emission sources you wish to quantify, you should calculate the greenhouse gas emissions from those sources. There are a range of approaches by which this can be achieved including direct calculation, using carbon calculators, life cycle assessment software and input / output analysis.

If you are using calculators that provide more specific emissions value calculations, check that these follow a clear methodology. If your goal is to achieve carbon neutrality, NCOS and the associated Carbon Neutral Program Guidelines provide guidance on how to establish the carbon footprint that you will need to offset. For such purposes a higher degree of accuracy will be required.

Q. Why do different emission calculators issue different results?

A. Calculators will vary depending on the assumptions made in the calculation methodology used and the amount of information required / given. Many different carbon calculators exist and these may provide the advantage to people of ease of use and requiring minimal data input but are likely to have the greatest uncertainty associated with them. How this uncertainty affects your organisation depends on your objectives.

For example, GHG emissions from airlines may vary owing to the assumptions applied, the calculators used and because a wide variety of information is needed to calculate GHG emissions on a per person basis.

This is a field of active research and much debate. 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, as well as to the presence or absence of co-benefits such as biodiversity and social outcomes. Higher quality projects may have higher prices but price alone is not necessarily a guide to project quality. Certified Emission Reductions (CERs) operate like stocks and shares and their prices can vary daily depending on supply and demand.

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 CO₂-e 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 offsetting one tonne of carbon dioxide.

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 Standard 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 cancelling or retiring offsets. One way to be certain that the offsets you have purchased are actually cancelled or 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 appropriately cancelled or 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 personal 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 reduction 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 CDM or Verified Carbon Units, or VCU’s under the Verified Carbon Standard) to ensure their quality.

Q. Can I offset all my emissions and become Carbon Neutral?

A. Yes. The National Carbon Offset Standard (NCOS) became effective as a voluntary standard from 1st July 2010. The Standard was developed by the Australian Department of Climate Change and Energy Efficiency and is administered by Low Carbon Australia. It facilitates companies being able to claim carbon neutrality for a product, service, event or organisation. The Standard also provides guidance on eligibility criteria for domestic offsets including additionality, permanence, measurability, transparency, and the third party audit and registration of offset units.

Companies that achieve this NCOS carbon neutral certification will have taken action to:

• Define what they are obtaining neutrality for
• Describe their emissions boundary including justifying exclusions
• Identify their emission sources
• Quantify their emissions
• Reduce their emissions as much as reasomably practicable
• Retire offsets to meet the remaining emission.

Q. Can I create offsets?

A. Yes. The Carbon Farming Initiative (CFI) is a carbon offsets scheme that has been established by the Australian Government to provide new economic opportunities for farmers, forest growers and landholders and to help the environment by reducing greenhouse gas emissions. Under this scheme participants may create carbon credits called Australian Carbon Credit Units (ACCUs). Depending on the type of project that is used to create the credits, they may then be traded in either the compliance or voluntary market in Australia and overseas.

The CFI is now operational, with the primary legislation underpinning it being:

• The Carbon Credits (Carbon Farming Initiative) Act 2011
• The Carbon Credits (Consequential Amendments Act 2011
• The Carbon Credits (Carbon Farming Initiative) Regulations 2011 and the
• The Australian National Registry of Emissions Units Act 2011

Proponents may propose methodologies under the CFI for offset projects and develop offset projects within Australia from emissions sources not counted toward Australia’s obligations under the Kyoto Protocol target. The DCCEE is responsible for determining the suitability or otherwise of methodologies, while the Clean Energy Regulator is responsible for regulating the creation and trade of the offsets.

The primary criteria for eligibility of a project requires that it be:

• Carried out in Australia
• Developed in accordance with an approved CFI methodology; including monitoring and reporting
• Implemented by a recognised offsets entity
• Be additional to business as usual (meaning that the emission reduction activity from the offset project would not have occurred anyway)

If you are a landholder or project developer with an interest in developing CFI projects you should contact the Department of Climate Change and Energy Efficiency or visit http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative/methodology-development.aspx.

The EPA Victoria website discusses issues of quality such as permanence, leakage, double counting, timing of emissions reductions and co-benefits. For more information click here

Q. What is soil carbon sequestration?

A. Soil Organic Carbon (SOC) refers to the carbon in soils associated with the products of living organisms. It is a heterogeneous 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 cycle and the global SOC pool 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.

Sequestration through soil carbon is recognised by the Carbon Farming Initiative. For information on the project types and potential contribution to the offset market refer to the DCCEE discussion paper at http://www.climatechange.gov.au/~/media/publications/carbon-farming-init....

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.

If you want to find out more about what methodologies have been approved or are being considered under the CFI or how to submit a methodology for consideration go to the DCCEE website at http://www.climatechange.gov.au/en/government/initiatives/carbon-farming-initiative/methodology-development.aspx

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.