The term carbon offset means that you attempt to mitigate or reduce the effects of your emission of greenhouse gases by trying to do other activities which may have an equivalent value. For example, you might attempt to mitigate your carbon footprint or amount of carbon dioxide that you are responsible for producing because you own a private vehicle, by planting many, many trees in your community. To mitigate means you are offsetting your carbon emissions rather than reducing the degree to which you create carbon emissions in the first place.

The term carbon offset is used in close relation to the concept of emissions trading. In emissions trading, a government agency is usually responsible for setting mandatory limits for emission of a type of pollutant. If the enterprise is able to stay within limits for emission of that pollutant, the government will grant economic incentives to the enterprise as a reward for reducing pollution released into the environment. Strangely enough, if an enterprise has surpassed the limit for the emission level of the pollutant, the enterprise has the option of purchasing “credits” from other enterprises which have been able to stay well within emission limits. A credit represents how much emissions an enterprise is permitted to release into the environment.

The same principle used in emissions trading has been set into place through the adoption of the global Kyoto Protocol carbon credits scheme. Carbon credits designates a monetary or financial value to greenhouse gas emissions. For instance, one credit means the owner of the credit has permission to release one tonne of carbon dioxide. The Kyoto Protocol is one internationally-recognized treaty which defines the limits of emissions that entire countries can release into the environment over a certain period of time. These countries are then responsible for regulating the businesses or enterprises which operate in their jurisdiction, as far as their level of emissions are concerned. Just like in emissions trading as shown above, the carbon credits scheme allows businesses which have surpassed the permitted amount of emissions released to purchase carbon credits from those businesses which have been able to stay within emissions limits. An interesting aspect of carbon credits is that they can be traded on an open market level as well, with a market price being observed.

On the other hand, there are companies which are able to observe a carbon project mechanism in the way they operate. A carbon project pertains to a business program where the enterprise attempts to reduce its total level of greenhouse gas emissions so that the company will receive funding in return (as a reward, so to speak.) Carbon projects are better than simply buying carbon credits because it means the business is attempting to voluntarily cut down on its greenhouse gas emissions. Some enterprises choose to adopt a carbon project because they may have been guilty of surplus emissions in the past, and saw the carbon project mechanism as being preferable to paying a carbon tax or buying carbon credits from other enterprises. (A carbon tax can be perceived as a default penalty to be paid by the enterprise because it surpassed limits for emissions.)

When one mentions the word global warming, an image of Jeremy Clarkson defending the usage of cars and denying their impact onto the environment comes into mind! The UK alone has become aware of the impending doom of the earth’s temperature rising by five degrees by the end of the century, causing rising sea levels, famine, drought and an increase in unpredictable weather conditions. As much as many believe that this is something of a myth, it is in fact something that is affecting us today.

When people are not aware of the adverse result of global warming the thought of global warming becomes something of an annoyance. However, many people have seen the carbon footprint adverts on TV and will question what this is about. How does one measure their own carbon footprint in their homes and what should one do to improve their carbon management? These are just a couple of questions arising from the doom of global warming, which I intend to answer in the simplest manner.

Businesses, companies, homes, schools and hospitals all contribute to global warming and are all subject to better carbon management. A carbon footprint is the measurement of carbon dioxide released and impacted by human activity. This measures how much humans affect the earth in terms of releasing greenhouse gases. Carbon emissions can be in the form of using your car, keeping lights on in the house unnecessarily, using too much electricity (such as keeping your computer on for prolonged periods of time) and much more.

Steps can be made to reduce the amount of carbon emission in the form of keeping the general everyday usage of things that may emit a higher level of carbon into the atmosphere at low number. The government began steps after the Kyoto Protocol which was aimed at legally binding targets to reduce the amount carbon emissions from main cities and surrounding areas. Working towards reducing the amount of greenhouse emissions is just one step to preventing the effects of global warming.

The media have also played an important role in passing on information about carbon emissions. Often some of the information can be distorted with myths on what can be construed as leaving your carbon footprint. Larger industries and businesses emit the most amount of carbon dioxide, which is much of the carbon management strategies are aimed at reducing carbon emissions in a typical office setting.

The most effective way of reducing carbon emissions is through automating the monitoring process, which will work on monitoring a live emission of carbon throughout the day. This will also enable companies to take control of how much energy they use from their equipment. Reducing carbon emissions from home can be as simple as switching your electricity company to another company which uses renewable sources. Also simple measures such as recycling basic materials such as paper, card, plastic and glass will help. Other instances such using your car less to travel to local areas, keeping your water usage controlled and not wasting water usage.

The Kyoto Protocol is a UN-led international agreement reached in 1997 in Kyoto, Japan to address the problems of climate change and the reduction greenhouse gas emissions. The Kyoto Protocol went into force on February 2005.

Signatory countries are committed to moving away from fossil fuel energy sources – oil, gas, and coal, to renewable sources of energy such as hydro, wind and solar power, and to less environmentally harmful ways of burning fossil fuels. Greenhouse gases such as carbon dioxide, methane and nitrous oxide are mainly generated by burning fossil fuels. Higher levels of greenhouse gas emissions cause global warming and climate change.

The Protocol commits 38 industrialized countries to cut greenhouse gas emissions by 2008-2012 to overall levels that are 5.2 percent below 1990 levels. Targets for greenhouse gas emissions reduction were established for each industrialized country. Developing countries including China and India were asked to set voluntary targets for greenhouse gas emissions.

The Canadian target for Kyoto is to reduce by 2012, greenhouse gas emissions by six percent below their 1990. The United States did not ratify the Kyoto Protocol, and in February 2002 introduced the Clean Skies and Global Climate Change initiatives, in which targets for reduction in greenhouse gas emissions are linked directly to GDP and the size of the U.S. economy.

Trading of carbon emissions is linked to a program called Cap-and-Trade. Understanding this concept is necessary to begin effective trading. A central authority (usually a government or international body) sets a limit or cap on the amount of emissions discharged into the atmosphere. Companies that exceed the cap may be subject to fine or regulatory sanction. Therefore, those who find they cannot meet the conditions of the cap will look to buy credits from those who pollute less.

Many older established companies are forced to spend considerable sums of money modernizing plants. In many instances this takes time, usually years to achieve. In contrast to new generation technologies which are not faced with up-grading facilities to comply with 1990 emission standards. Trading emission credits is a way for low emission companies such as wind farms to sell credits to benefit higher emitting companies. Cap-and-trade programs ultimately aid in being a net benefit to the host country by enabling it to meet it’s commitment to the Kyoto Protocol Agreement.

From the very beginning, this first phase of the European Union Emissions Trading Scheme, or EU-ETS, was intended to be a learning period to work out the kinks and entice major greenhouse gas emitters on board.

On January 1, 2005, the EU-ETS came online with the cap-and-trade program covering approximately 12,000 installations including electricity production and some heavy industry. These 27 member countries of the European Union represents roughly 45 percent of total European CO2 emissions.

Now three years later, amid a flurry of expectations and public controversy, the European Union has credible results to back up its claim of success. Recently, a Massachusetts Institute of Technology analysis of the EU Emissions Trading Scheme (ETS) affirms that despite rather unstable beginnings, the system has been an unprecedented success. More importantly, it opens the door for skeptical countries like the United States to follow suit.

The United States would have been required to reduce its emissions 7 percent below 1990 levels had it accepted ratification of Kyoto. Instead, U.S. emissions have now risen more than 16 percent between 1990 and 2005.

The Bush administration and Republican lawmakers opposed to emission caps have been touting the Asia-Pacific Partnership on Clean Development and Climate, which consists of Australia, China, India, Japan, South Korea, and the United States. The aim of the initiative, which began in 2005, is to foster cooperation on ways to improve clean energy development and lower emissions without global mandates. But since the initiative started, the United States, India, and China have come under increased domestic pressure to move toward mandatory emission controls. California is among several U.S. states that have entered into partnerships or passed laws for controlling greenhouse gases ahead of the federal government, leading to a showdown with congressional lawmakers. Major U.S. cities have also instituted a host of policies designed to cut greenhouse gases.

Without the United States entering into a binding commitment, it is feared that several developing countries which have not yet signed plus some Kyoto signatories may be unwilling to agree to additional international commitments.

Copyright (c) 2008 Daniel Lafleche

Must the costs of clean development necessarily be prohibitive for developing nations?

Let’s take a closer look at exactly how this is called into question.

There is a common belief that the most efficient way to rein in greenhouse gas emissions is to implement a two-tiered regime in which developed nations will shoulder a much greater burden. The justification for this belief is that because it is wealthier, the necessary foregoing of present consumption will be much less as a proportion of national income. The hardship endured will therefore be substantially less.

There are a number of arguments as to why the nominal costs of developing green infrastructure and power generation should be greater or lesser in developing countries. Those who suggest the costs are greater point to the need to import (often expensive) hardware and foreign technical expertise. Those who argue that it can in fact be less costly point to lower labor costs in developing countries and, sometimes, cheaper domestic inputs. The true answer of course is case- and industry-specific. For simplicity, let’s assume that the costs are broadly the same at the aggregate level.

But what if the costs of “green investment” in developing countries could be defrayed or even offset entirely, and this without increasing tax strains or calling for foreign donors to foot the bill? Innovating intermediaries such as UK-based EcoSecurities have been so bold as to make this seemingly improbable end a reality. The concept is delightfully simple; as allowed for under the Kyoto Protocol’s Clean Development Mechanism (CDM), developing nations which reduce their greenhouse gas emissions are entitled to carbon credits which can in turn be sold on an open market. These credits are readily purchased by developed-world producers that need them to be in compliance with emissions caps. And the developing-nation party has found an essentially zero-cost avenue to sustainability.

For a better understanding of the mechanism and the championing role played by the intermediary, let’s take a look at an EcoSecurities case study. The process begins with an assessment of a company’s assets to determine the emission reduction that can be achieved. In the project development phase, the necessary “green investment” is implemented with zero capital investment by the contracting company. Finally, EcoSecurities guarantees that it will purchase the carbon credits generated after implementation. The Celulose Irani biomass-to-electricity project in Brazil is an exemplary case. With the help of EcoSecurities, this paper producer was able to find a clean and renewable source of energy by utilizing the biomass that is a by-product of its production process. EcoSecurities provided financing for the project, and lent its technical know-how of biomass energy production to Irani through the implementation of the project. After completion, EcoSecurities purchased Irani’s new carbon credits for resale. Without this involvement, Irani’s expanding production would have continued to apply pressure to the traditional fossil fuel-derived grid.

There are currently more than 900 registered CDM projects underway around the world, about 60% of which are to be found in Asia and the Pacific. The viability of these projects is, of course, dependent upon the continuing ability to sell the acquired carbon credits. This means that the project would become unsustainable if the market for those credits were ever to dry up (for example if developed nations, pursuing their own green projects, no longer needed to purchase carbon credits to comply with emissions caps).

In a world where the United States alone accounts for a quarter of greenhouse gas emissions, provided that some permutation of the two-tiered international agreement can be reached, this seems rather a distant scenario.

Calculating carbon emissions is a complex process. The different types of emissions need to be identified and collected company wide. From this information, the amount of each type of gas released into the environment needs to be calculated. In addition, tracking methods need to show the daily use of refrigerant gas. The end result will show the global warming potential for each facility with a refrigeration and air-conditioning (RAC) system or heating, ventilation and air conditioning (HVAC) system. Refrigerant systems use high levels of greenhouse gases, so the EPA established the Climate Registry Protocol for calculating carbon emissions on a regular basis. The international equivalent of this requirement is outlined in the Montreal Protocol and Kyoto Protocol. The main purpose for calculating carbon emissions is to begin reducing the damaging effects that refrigerant gas has on the environment. Commercial refrigeration and air-conditioning (RAC) systems or heating, ventilation and air conditioning (HVAC) systems operate on refrigerant gas, which is made up of hydrochlorofluorocarbons (HCFCs), chlorofluorocarbons (CFCs) and perfluorocarbons (PFCs). When broken down, these substances contain carbon, chlorine, fluorine and hydrogen. These gases are major ozone depleting substances. By calculating carbon emissions, government environmental agencies will be able to better understand the situation. Companies who fail to report their carbon emissions will be issued a substantial fine. Various carbon emissions reporting protocols have emerged from the EPA, ISO, World Resource Institute, and Climate Registry protocols. All of these documents define in great detail how organizations must collect data, calculate carbon emissions, and report the results. In short, the monitoring, tracking, and reporting requirements mandate that all locations where refrigerants are being used or serviced must collect, organize, and calculate as part of an enterprise’s carbon emissions. Some volume of carbon is released into the environment by any company with a refrigerant system. Trying to determine how much carbon is emitted is an intricate process. Calculating carbon emissions begins by collecting data across the entire company and all its locations and identifying the gases. From there, a determination on how much of each gas is released must be made. Then various reports that include tracking methods need to be completed and submitted. Refrigerant management programs can best handle the tedious process of calculating carbon emissions. With so many components involved, a computerized refrigerant management program is much more effective than manually handling and reviewing paper reports. A refrigerant management program that includes a solution for refrigerant gas tracking and an automated way to calculate carbon emissions is important. Solutions like this make is easier to handle calculating carbon emissions for all AC/HVAC systems operated by a company. There are several reasons that led to the EPA and international environmental agencies to require companies to include calculating carbon emissions in their reports. It is an important step to define your organizational boundaries, where you do business, and to identify the refrigerants you own or other sources of greenhouse gases (GHGs). Equally important is to establish a tracking mechanism for determining how much harmful gases are released at any given time. The information and data collected for the emerging refrigerant management programs will enhance and improve atmospheric conditions with specific requirements for reducing carbon (CO2) emissions. By calculating carbon emissions, companies will be able to recognize the extent of their carbon footprint. For companies with multiple locations using refrigeration and air-conditioning (RAC) systems or heating, ventilation and air conditioning (HVAC) systems, the task becomes even more critical. But there is help to address this challenging issue. Emerging software provided by clean-tech development firms track carbon dioxide gas emissions across all sites so companies can do their part to ensure a healthy environment for years to come.

United Nations Conference on Climate Change is the largest intergovernmental conference on climate control that was ever held throughout the history of humanity. Aside from explicit achievements, the largest accomplishment of the Conference is the acknowledgement of the emerging changes in the world arena. Globalization of markets and, as a consequence, global governance in both trade and services, privatization of the energy sector alongside with increasing role of private sector have forever changed the context in which environmental issues should be viewed.

Kyoto Accord or Kyoto Protocol is an amendment to the United Nations Framework Convention on Climate Change that was negotiated in Kyoto, Japan, in December 1997 and was brought into force 90 days after Russian ratification. The amendment represents a new generation of environmental international relations and treaties adopted in the light of globalization. The major aim of Kyoto Accord is to impose control on economic activities related to energy production and foreign investment and in such way minimize the risks for environment. Under this agreement, countries are to reduce emission of greenhouse gases by 5.2%, whereas the long-term perspective is as much as 29% by 2010. The limits are imposed on 6 greenhouse gases: CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. The economic effects of Kyoto Accord have been an issue of prime concern within the last years and neither one of the parties is able to provide a definite solution as well as outline the potential results of implementation of the amendment. There are three mechanisms in Kyoto Accord that allow for worldwide implementation and are aimed at the environmental goals established by United Nations Conference on Climate Change. The mechanisms are also known as Kyoto Flexible Mechanisms: the Clean Development Mechanism, the Joint Implementation Mechanism, and the greenhouse gas emission trading.

The idea of emission trading is rooted in the concept of unity between countries with Kyoto targets. While every country will be assigned a certain limit within the period from 2008 until 2012, those who do not meet the established quota can sell the leftover amount to countries who emit too much of greenhouse gas. European Union went further; it established specific quotas on CO2 emissions for as much as 11,500 energy intensive plants that are located on the territory of members of EU.

The remaining two mechanisms, Clean Development and Joint Implementation, are aimed to reduce emission of greenhouse gases in other countries. Industrialized countries as part of their long-term plan to achieve reduction in emission of greenhouse gases are to run projects abroad, whereas the results are counted towards their own reduction achievements. While Joint Implementation allow for project implementation on the territory of countries with Kyoto targets, Clean Development is aimed at reductions on the territories of developing countries. By implementing two mechanisms United Nations stimulates reduction in gas emission by transferring technologies to developing countries and developing unity between countries with Kyoto targets. While Joint Implementation will be put in force only in 2008, the Clean Development Mechanism is already successfully functioning since 2000.

The Montreal meeting of the United Nations on Climate Change in 2005 finalized the details of Kyoto Protocol. The 11th Conference on Climate Change was held from 28 November to 9 December. During the Conference 40 decisions regarding long-term cooperative actions and detailed guidance for countries with Kyoto targets have been adopted. Marrakech Accords that is generally referred to as the “Kyoto Rulebook” is considered to be one of the most important accomplishments. The “Rulebook” allows the formal implementation of the Kyoto Protocol. While industrialized countries have started a cooperative action to address the climate change, all members have agreed to proceed with an open dialogue. Basically, on the Montreal Conference implementation of the Kyoto Protocol was ensured. There also were held parallel events touching the following major themes: understanding and preparation for the change, showcasing solutions and sharing best practices, raising awareness and cultural events