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The Role of Carbon Credits as Part of a Decarbonization Strategy

Paul Gray

There is consensus among the scientific community: our climate is warming, and human activities are contributing to this. The recent IPCC AR6 Synthesis report confirms that global surface temperatures continue to increase at a pace incompatible with a sustainable future, leading to significant impacts for people, animals, and the healthy functioning of our planet. The path to avoiding 1.5°C has been essentially shut without immediate and deep emissions reductions. In fact, there’s a 40-60% chance we could exceed 1.5°C by 2030 based on current projections. 

We’re making progress, but not fast enough. More work needs to be done to decarbonize the economy, and net negative emissions via carbon dioxide removal (CDR) at scale are essential to get back to 1.5°C by 2100.

This will require the combined efforts of policy makers, technology innovators, and business leaders. Businesses must step up their ambition and change their operations to reduce emissions by transitioning to renewable energy and improving energy efficiency. In addition, businesses can help accelerate the transition to a cleaner economy using carbon credits.

Businesses can help accelerate the transition to a cleaner economy through the use of carbon credits

Measuring carbon emissions

Businesses of all sizes can begin their decarbonization strategy by first measuring their emissions. It can be useful to understand the distinction between direct and indirect emissions. Defining these as Scope 1, 2, or 3 emissions can help illustrate what generates emissions and how a business can affect theirs.

  • Scope 1: Direct greenhouse gas (GHG) emissions that a company generates from its owned and controlled resources. This includes generation of electricity, manufacture and processing of materials, waste processing, and transportation using the company’s own vehicle fleet.
  • Scope 2: Indirect emissions created by the generation of purchased energy from a utility provider.
  • Scope 3: All indirect emissions (not included in Scope 2) that occur in the value chain of a company. These emissions are a consequence of the company’s business activities, including both upstream and downstream emissions. Scope 3 emissions tend to account for 90% of all emissions.

Changing operations to reduce emissions

Once emissions have been measured, a business can take action to change its operations and start their carbon reduction journey. Whether acting independently or as part of a supply chain program sponsored by one of their customers, small and medium-sized enterprises (SMEs) can use Zeigo Activate to accelerate decarbonization. With Zeigo Activate, users have the ability to:

  • Track their emissions
  • Set a decarbonization target
  • Follow a customized plan to reach their goals
  • Access an open marketplace of solution providers like Patch
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There are many ways that a business can reduce its carbon emissions, from adopting renewable energy in its workplaces to choosing recycled materials for products and packaging through to striving for efficiency in operations. For example, a business that delivers products within a metro area can explore using bicycle delivery over cars or vans.

It may take some time for emission reductions to take effect, and there can be limitations on the availability of services needed. This is why carbon removal plays an important role.

Combining removal with reduction

It may take some time for emission reductions to take effect, and there can be limitations on the availability of services needed. This is why carbon removal plays an important role. Zeigo Activate makes it easy to purchase carbon removal credits through its partnership with Patch.

Carbon credits in cap-and-trade systems are typically calculated in terms of one metric ton, or more commonly one tonne, of carbon emissions or their equivalent in other greenhouse gasses. (A tonne, or metric ton, is 1,000 kilograms—that converts to roughly 1.1 US tons, which weigh 2,000 pounds.) To put that number in some context, a roundtrip transatlantic flight produces 1.6 tonnes of CO2 per passenger, while a typical driver produces 2.4 tonnes of CO2 over the course of a year.

Carbon removal is the act, whether through engineered or natural methods, of removing CO2 from the atmosphere, and there are many approaches that facilitate this. Some are established, and working at larger scale, whereas other technologies are nascent and yet to be proven at scale. With Patch, Zeigo Activate users can access technologies including:

  • Forestry: reforestation and afforestation, as well as improved forest management (IFM), such as deferred harvesting.
  • Ocean-based carbon removal: The oceans can hold a tremendous amount of carbon, in the form of either CO2 gas dissolved in the water itself or organic plant matter that grows in the sea. Approaches include seaweed sinking, and alkalinization.
  • Mineralization: This process relies on compounds that naturally react with CO2, converting it into a solid state. Processes include enhanced weathering, as well as techniques such as concrete injection.
  • Biomass: Biomass is any organic matter (i.e., plants and animals)—all of which contain high carbon content. While some groups define biomass as avoidance, carbon removal via biomass refers to the ways in which this matter can be converted into long-term carbon storage solutions, including burial, bioenergy with carbon capture and storage (BECCS), bio-oil, or biochar.
  • Soil: Regenerative grazing, regenerative agriculture, and soil amendment
  • Direct Air Capture: In this process, air is moved through a system that uses liquids or solid-state filters to extract the CO2 

When a business purchases carbon credits, it can use these to account for emissions it has yet to reduce. The purchase also has a powerful impact towards our shared goal of decarbonizing the economy. Credit purchases provide revenue to the companies that are building new technologies that will help power a cleaner economy and ultimately create a livable future.

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With Zeigo Activate’s partnership with Patch, businesses can access a growing selection of vetted climate projects across a range of technologies and geographies. Businesses can access nature-based or engineered credits that align with their goals, then purchase them directly in just a few clicks via the Patch dashboard in amounts from as little as one gram of carbon to thousands of tonnes.

When a business purchases carbon credits, it can use these to account for emissions it has yet to reduce. The purchase also has a powerful impact towards our shared goal of decarbonizing the economy.

Measure. Reduce. Remove

Businesses play an important role in the decarbonization of our economy and our efforts to limit climate change to 1.5°C by 2100. Zeigo Activate makes it easier for small and medium-sized enterprises to take action from measurement to reduction and removal of carbon emissions.

This article was originally published on LinkedIn.

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