Q: What are carbon credits?
A: Carbon credits are what companies that emit excessive greenhouse gases can purchase as a way to “offset” their excess emissions. Essentially it is a way for companies to pay other companies to “clean” their emissions. It was originally presented in the Kyoto Protocol as a way to reduce emissions without imposing undue economic hardship on industries that currently lack the technology to economically reduce emissions.
Q: What is the difference between carbon offsets, carbon storage, and carbon credits?
A: Carbon storage occurs when a natural process, such as grass growth, increases the amount of carbon stored in the soil each year. A carbon offset refers to a land use practice that simply reduces emissions of carbon dioxide each year. The “offset” is generated by a land use practice that stores carbon or one that, compared to the current land use, simply leads to lower carbon dioxide emissions from the soil. This difference can occur by shifting the landscape from emitting more carbon dioxide than is stored to one that either has a lower net emission of carbon dioxide or stores more carbon dioxide than it emits. Carbon credits are what greenhouse gas-emitting companies purchase to offset their excess emissions.
Q: What determines whether carbon dioxide is stored in or emitted from the soil?
A: Soil carbon found in the soil results from many processes and factors. Fundamentally it is increased by factors that enhance photosynthesis, the process by which plants convert light energy from the sun and carbon dioxide from the air into various carbon-based products such as sugars and cellulose, and decreased by factors that enhance the respiration of the products of photosynthesis back into carbon dioxide. In general, carbon storage in soil is increased by a greater production of roots and lower activity of the abundant but tiny microorganisms in soil that decompose dead roots and convert them back into carbon dioxide.
Q: Why do soil carbon credits need to be certified?
A: Essentially to avoid fraud. Carbon in soil is difficult to measure directly, as it ordinarily requires the analysis of dozens to hundreds of soil samples (cores taken from different points across the landscape). Carbon markets like the Verified Carbon Standard evaluate proposals that show a scientifically demonstrated connection between particular land use practices, such as rotational grazing, taking land out of agriculture, or wildlife conservation, and a change in the amount of carbon stored as organic matter in the soil. If this connection is shown to be strong, the market will “certify” the land use practice as one that yields a specified reduction in greenhouse gas emissions
Q: Can I find out more detailed information on the science behind the idea of soil carbon credits?
A: Read the summary of the scientific basis in The Research Behind It All, both in terms of experimental results and ecosystem modeling, for determining the offset in CO2 emissions that results from increasing wildlife populations and moderating fire frequency in East Africa. It also includes information about how remote sensing can be used to verify that the desired land use changes have occurred, which is a key component of a carbon contract.
Q: Who can sell carbon credits?
A: Benefits of carbon credit sales can be distributed according to terms of the contract to landholders, including government agencies, land owners, lessors, or others with authorized land tenure. This distribution of revenue can be negotiated for each contract. For an example of how carbon contracts for soil management practices are implemented on the Chicago Climate Exchange, click here. Note that the “designated areas” are those for which the climate exchange judged that there are sufficient data to determine the relationship between land use and carbon storage (or loss).
Q: How are carbon credit contracts structured?
A: Currently the Verified Carbon Standard is the only market that certifies soil carbon as a greenhouse gas offset. The carbon offset provider(s) typically must agree to employ a specific land use practice for five years. Providers must set aside 20-40% of their revenue to mitigate against risk, such as that of a catastrophe such as drought that would prevent the expected offset of carbon dioxide emissions. Projects that are likely to offset less than 10,000 metric tons of carbon dioxide annually. You can look at an example of a soil carbon contract (click here for PDF) that could be adapted for use on rangelands. This contract for soil carbon offsets is used by a company called an “aggregator” that combines the offsets from multiple landholders and sells them on the exchange.