The creation of carbon credits/carbon offsets occurred with the signing of the Kyoto Accords in 1997. It has been generally accepted that the concept of carbon trading originated from the US EPA Acid Rain Program which utilized market mechanisms (CAP & Trade) to reduce Nox & Sox emissions from electrical power producers. This initiative was considered a success at that time.
In 1998, the Government of Ontario initiated a program called PERT (Pilot Emission Reduction Trading). This program was comprised of a group of interested stakeholders from industry, government, and NGOs in collaboration with Ontario Power Generation. Their objective was to explore how to create and verify emission reductions of carbon and adapt it to a market model.
Ontario Power agreed to acquire the emission reductions in order to offset their emissions of CO2 from their coal fired power plants. This was done on a purely voluntary basis. Highland Energy, which owned and operated a landfill gas to energy project in Montreal, joined PERT in order to learn as much as possible about this new concept as it had discovered that by utilizing landfill gas as a fuel to generate renewable energy, it was destroying the methane content of the landfill gas. Methane is a greenhouse gas with 21 times the global warming capacity of CO2.
Through the process of quantifying, verifying and being peer reviewed by 35 stakeholders at PERT, Highland Energy created and sold carbon offsets to OPG in 1998. This was one of the first transactions of its kind in the world. With the implementation of Kyoto, the potential for creating carbon reducing programs was immense. Everyone at PERT was excited about the potential
to make a real difference in reducing CO2 emissions globally. We were envisioning a fungible marketplace for carbon credits with unlimited potential.
This was not to be.
THE REALITY TODAY
Today, the market for carbon credits offsets is confined to a relatively small number of government mandated compliance programs primarily located in North America and Europe. Each compliance program addresses specific jurisdictional needs with its own underwriting criteria and its own rules on which types of projects are acceptable, with geographic limitations being imposed.
There is no coordination between the various compliance programs and the emission reduction projects are not fungible. There is also a voluntary market that, in volume, is a fraction of the compliance market, with relatively few participants who wish to become carbon neutral. As pricing is at a minimum, there is limited incentive to create emission reducing projects for this market.
CREATE AN OPPORTUNITY FOR EVERYONE
Carbon Asset has a goal that will allow everyone on the planet to make a contribution to reducing the emission of carbon into the atmosphere.
Carbon offsets have been traditionally denominated by volume, in metric tonnes. Through the breakthrough technology of the blockchain (distributed ledger technologies) we are now able to fractionalize carbon credits from tonnes into grams. With grams of carbon credits we are now able to offset the carbon footprint of individual consumer products. Everything from a cup of coffee to a Tesla can now be certified carbon neutral.
Rendering individual products and services carbon neutral with millions of micro transactions has the potential of opening up a vast global market for carbon offsets. It has been well documented that a majority of people, especially millennials, given the choice would purchase a product with environmental benefits over one that doesn’t. It follows that by creating this demand for offsets we are also creating a demand for carbon reducing projects as well.
MORE WINS FOR THE PLANET
An additional consequence of this initiative will be that the demand for offsets will increase. Therefore, incenting developers to create carbon emission reduction projects.
At Carbon Asset as part of our long term plan we intend to work with project developers by entering into long term agreements for offsets at a price that will make the projects economically feasible to develop.
Remember that for every offset that eliminates the carbon footprint of a product this will result in a reciprocal action in reducing the emission of carbon into the atmosphere.