Carbon credits equal one ton of CO2 emissions avoided or captured by a carbon project. There are many types of carbon projects that produce these credits.
Broadly speaking, there are two major types of carbon offset projects; nature-based projects, and non-nature based projects.
In this guide, we’ll explore 9 different carbon offset examples and take a deep dive into the different types of carbon offset projects that support decarbonization, but also have additional environmental or social co-benefits that are in line with the UN Sustainable Development Goals.
Nature-Based Solutions
Nature-based solutions (NbS) projects produce credits based on either the carbon captured by new trees or by the carbon not released through the protection of forests.
These projects exist all around the world, from growing forests right here in the US to replanting mangroves in Nigeria or rewilding the rainforests of Brazil. Nature-based projects protect and restore the Earth’s largest carbon sinks in our forests and soils.
Nature based projects have several advantages, such as the many benefits they offer outside of carbon. Protecting ecosystems, wildlife, and social heritage is significant for companies offsetting their carbon emissions for the corporate social responsibility element.
NbS projects that get certified by VCM carbon standards (and generate carbon credits) generally fall into three main categories:
Forestry projects are the reigning champs — they provide the vast majority of NbS credits in the VCM, and are generally considered to have the greatest potential to deliver climate change mitigation along with other benefits.
They can include:
Forest conservation projects;
Improved forest management;
Projects designated as ARR — which is not a pirate greeting , but rather an acronym for Afforestation, Reforestation and Revegetation. ARR projects restore degraded forest land, reforest previously forested land, or convert non-forest land to forests through human intervention.
Agricultural projects are another major NbS category, which includes:
‘Regenerative agriculture’ practices that store sequester soil carbon, such as low-till or no-till practices, cover crop rotation, and biochar;
Activities to reduce emissions of methane and nitrous oxide, like livestock and fertilizer management;
‘Agroforestry’ — where trees are planted in the same land areas used for crops or livestock;
Projects to restore and avoid the conversion of grasslands.
Wetlands projects — including coastal wetlands and peatlands — get extra points for holding the greatest amount of carbon stocks per unit area of any ecosystem. Often referred to as Blue Carbon, these types of projects include:
Avoiding conversion or degradation of coastal ecosystems;
Restoring mangroves, marshes, and seagrasses;
Enhancing the growth of kelp or shellfish;
Rewetting of drained peatlands, and restoration of peatland vegetation.
Let's dive deeper into these project types.
1. Reforestation/Afforestation
These are the most well-known nature-based carbon capture projects in the market. These carbon offset projects aim to restore degraded or barren land by planting trees.
They create forests on land that may have been unforested or regenerate forests that have been deforested either by human activities or natural disasters.
Reforestation and afforestation projects provide important co-benefits outside of carbon capture, including supporting biodiversity, improving water filtration in the soil, and providing jobs to the local communities.
The lifetime of a reforestation or afforestation project typically ranges from 20-100 years, with a ramp-up period of carbon capture in the first years of the projects as trees mature and begin absorbing carbon in biomass.
This project type also has a sub-category: agroforestry. Agroforestry projects combine trees that can produce fruits and nuts and crops on the same plot of land, enabling mostly small shareholder farmers to make the most out of their land while also capturing carbon in the plants and soil. These practices can store significantly more carbon than conventional agriculture[1].
Co-benefits of this type of project vary from increased income for farmers and overall economic growth in the involved communities, food security and biodiversity support.
2. Forest Conservation
When forests are degraded, they can become a source of greenhouse gas emissions by releasing the carbon that has been stored in their organic matter and soil. It is estimated that deforestation accounts for around 10% of global CO2 emissions[2]. Forest conservation projects avoid these emissions by ensuring forests are protected from deforestation.
Forest conservation projects - such as REDD+ (Reduce Emissions from Deforestation and Forest Degradation PLUS the sustainable management of forests and the conservation and enhancement of forest carbon stocks) projects - prevent the loss of existing forests by protecting or enhancing forest cover.
These projects protect forests from unplanned deforestation – deforestation caused by local communities through agriculture or illegal logging; or from planned deforestation – from commercial activities that deforest the area such as crop plantation or cattle ranches.
Forest conservation projects provide co-benefits that positively impact biodiversity and local communities by providing protection to local species, including endangered species and additional income streams to local communities and employment.
3. Blue Carbon
Blue carbon projects follow similar practices as the project types described above but with a focus on carbon stored in coastal and marine ecosystems.
These projects can include mangroves restoration and conservation as well as other wetlands ecosystems such as seagrass or most recently kelp. These projects have the capacity of capturing large amounts of carbon not only in the aerial biomass but also in the soils, this is particularly true for mangroves.
Blue carbon projects have recently received a lot of attention mostly due to the vast benefits they provide. These projects offer climate change mitigation benefits preventing erosion, and absorbing storm surge impacts during extreme weather events. Mangroves are ideal breeding grounds for fish and shellfish as they provide shelter for young species before they move to open waters. Not only do they support marine biodiversity but are also an important ecosystem for birds and reptiles.
4. Regenerative Agriculture
Agricultural land takes up approximately 38% of the global land surface and is a large contributor to GHG emissions at 11.2% of total emissions in the US[3][4]. To combat this problem, regenerative agriculture projects implement soil-enhancing practices that capture carbon in the soil creating carbon sinks in agricultural land.
These projects not only help in capturing carbon through practices such as crop rotation, no tilling, or reducing synthetic pesticides and fertilizers, but they also increase yields and help farmers have more productive land, also helping create more sustainable food security.
5. Grassland Management
Grassland management projects support land managers and pastoralists around the world to implement practices that increase the potential for the soil to capture additional soil organic carbon. The practices include strategic rotational grazing systems, reduce days grazed on all pastures and prioritize rest on grasslands. The result is healthier grass, greater root depth and increased soil carbon resulting in increased infiltration and retention of precipitation.
Non-Nature Projects
There are also non-nature-based projects that support decarbonization efforts, though they currently are not a major source of carbon credits in the VCM due to pricing and scale challenges.
Nonetheless, these projects capture or avoid carbon dioxide emissions through manmade technologies and many expect them to play an increasingly important role n creating a net zero world.
Let's dive into the main types of non-nature projects.
6. Renewable Energy
These projects generate energy from renewable sources such as wind and solar, decarbonizing the grid and reducing the dependency on fossil fuels such as coal and oil. The carbon credits are calculated by the number of emissions avoided by replacing energy produced by fossil fuels.
These projects have additional benefits such as providing energy efficiency, improving air quality, creating job opportunities, and sharing knowledge with locals to develop new technical skills.
7. Household Devices
In rural or underdeveloped communities, the use of open fires for cooking is common. This not only is a danger to community members but also is a large contributor to GHG emissions and local deforestation. Household devices such as efficient cookstoves and water filters provide equipment that either reduces the amount of fuel used or completely eliminates it.
These projects offer many benefits to rural communities such as health benefits from the smoke reduction in homes, reduce deforestation in the local forests, and families, specifically women, spend less time and money on wood and charcoal for fuel.
8. Waste Management
A waste management project often involves capturing methane and converting it into a reliable energy source. Sometimes this means capturing methane emitted through the decomposition of waste in landfills, or in smaller villages, human or agricultural waste. In this way, waste management projects can impact local communities by reducing air pollution and bad smells, reducing contact with waste, and reducing potential safety hazards such as landfill gas explosions.
9. Carbon Dioxide Removal
These projects include technologies that capture CO2 emissions from the air (direct air capture, or DAC) and either store it geologically or use it for different purposes. These carbon removal projects are currently costly to scale and as such, have not been tested at scale. These credits exist today but have not been certified by an international standard, like all the previous carbon reduction project types, and are in very short supply.
There also exists a number of up and coming carbon removal technologies, such as biochar (a cross between a NBS and technological project) and carbonated cement, to name a few. These projects are still at a very early stage and have yet to scale.
Sources
[1] https://www.cabi.org/forestscience/news/65086
[2] https://www.fao.org/redd/en/
[3]https://www.fao.org/sustainability/news/detail/en/c/1274219/
[4]https://www.ers.usda.gov/topics/natural-resources-environment/climate-change/