Today's carbon markets are plagued by a broken system that inadequately measures the impact of carbon credits. However, there is hope on the horizon. A redefined carbon credit framework, known as Carbon 2.0, offers a more innovative and effective approach.
Published February 1st, 2024
Carbon 1.0: Understanding the current carbon credit definition
Today’s carbon credit definition is poorly defined. And to understand the need for redefining the standards of carbon credits, we must first grasp the workings of the current system and its shortcomings.
The concept of carbon credits emerged to facilitate the reduction of carbon emissions for businesses and industries alike. However, the current system uses a broken yardstick to measure the impact of carbon credits, lacking consistency and transparency and failing to consider the long-term consequences of our carbon emissions.
The current system is defined as one metric tonne (mass) of carbon per carbon credit. Period. This definition lacks any consideration of how long the carbon is stored, that is, duration of storage. Was the carbon stored for 10 years? 20 years? 10,000 years? Moreover, it lacks any consideration of when the carbon was stored: timing. Did the carbon reduction happen 100 years ago or 10 years in the future? We don’t know.
Let’s look at these three attributes of carbon impact: mass, duration, and timing.
Of the three, our current system accounts for mass, but not so duration and timing.
Under the current system, buyers have no assurance about a carbon credit they buy. It could represent one tonne of carbon dioxide stored out of the atmosphere for 20 years, 100 years, or even 10,000 years. And it could be past, present, or future, which means every credit issued has the potential to fall short of the emissions it is offsetting. In short, the scales don’t balance.
This lack of clarity puts a burden on buyers (“buyer-beware!"), and makes it difficult for companies to make informed decisions about their sustainability practices and carbon footprint reduction strategies.
On a global level, this is a bad deal for society. The lack of standardization causes higher transaction costs, increased confusion, greater market manipulation, lower credibility, lower volumes of purchased credits, and ultimately less progress against climate change. It is time for a change to the carbon market system.
A new definition: Introduction to Carbon 2.0
Welcome Carbon 2.0, a cutting-edge solution with the potential to completely transform the carbon credit market. Carbon 2.0 has the remarkable ability to accurately measure and compare the impact of any project, regardless of its mass, duration, or timing.
The Carbon 2.0 definition balances the scales.
What does this mean? In Carbon 2.0, the scales balance by equating the positive impact of a carbon project to the negative impact of one tonne of carbon dioxide emitted into the atmosphere forever. In both cases, Carbon 2.0 accounts for all three attributes: mass, duration, and timing.
Unlike the Carbon 1.0 status quo, we are the only developer that voluntarily bundles multiple tonnes of carbon dioxide into each credit to compensate for the permanence of emissions in the atmosphere. We do this to ensure the environmental integrity of each carbon credit. And as an added benefit, measuring all three attributes (mass, duration, and timing) provides a standardized view of the impact of any project, of any mass, for any duration, across any time period.
How does Sky Harvest accomplish this?
How Carbon 2.0 measures a credit:
Our carbon credit is the right to claim positive environmental attributes equal to the negative impact of one metric tonne emitted in the atmosphere forever.
Adopting a transparent and accountable system like Carbon 2.0 is essential at this juncture. It equates the impact of diverse projects and facilitates a more efficient marketplace. We need to ensure that our investments are not merely supporting hollow promises but are instead directed towards tangible solutions that combat climate change.
Impact on buyers
The shift from the current carbon credit system to Carbon 2.0, not only benefits the environment but also provides numerous advantages for businesses:
Confidence in climate claims
Surety that each credit quantitatively offsets mass, duration, and timing of emissions
Ability to compare “apples-to-apples” across credit types (today’s market is full of oranges, apples, bananas, and yo-yos)
Standardization of impact
Simplification of offset tracking
Reduction in unnecessary environmental consulting expense
Reduction in internal labor expense divining the value of a credit
Obsolescence of more costly emissions reduction initiatives
Now is the time to harness the power of Carbon 2.0. It creates an efficient market that truly enables us to combat increasing emissions in our atmosphere. Its implementation will result in a more streamlined and dynamic market, empowering us to effectively address the challenges posed by global warming.
With its readiness for immediate adoption, we have an opportunity to establish a market that is both efficient and liquid, bolstering our ability to redefine the standards of carbon credits.