Why and how do firms buy carbon credits?
Carbon credits allow companies to compensate for emissions generated by activities such as air travel, shipping and manufacturing, by paying for emissions reductions or removals elsewhere.
One carbon credit represents 1 tonne of greenhouse gas emissions reduced or removed from the atmosphere.
Forest conservation projects, for instance, can generate credits by preventing deforestation and the release of carbon stored in trees and soil. Other projects earn credits by removing carbon dioxide already in the atmosphere.
Before these credits can be sold, the emissions saved must be calculated and independently verified.
Unlike projects that reduce emissions by replacing fossil fuels with cleaner energy, forest projects face an additional risk: Carbon stored in trees and soil can later be released through fires or deforestation.
Do forest fires wipe out the credit?
When a protected forest burns, carbon stored in its vegetation and soil can be released back into the atmosphere, potentially undoing some of the emissions savings that the project was credited for delivering.
Read Full Article At Source
