Carbon credits let you help build projects in communities across the country that reduce greenhouse gas emissions beyond what you can achieve through individual action. Carbon credits are purchased to fund these projects and diminish the impact of your own GHG emissions, even though the projects are located elsewhere. Carbon credits make environmental and economic sense- for emissions that are impossible to reduce, you can use funds to help reduce emissions elsewhere.

What is a Carbon Credit?

A carbon credit is a certificate representing the reduction of one metric ton of carbon dioxide emissions, the principal cause of climate change. Carbon credits are an important financing mechanism for Terrapass’s emission reduction projects. In fact, when selecting credit projects for funding, Terrapass employs the rules of additionality, meaning that these projects would not be built and operated without the money provided from the sale of credits. Although complex in practice, carbon credits are fairly simple in theory.

Develop a Project That Reduces Carbon Dioxide Emissions

If you develop a project that reduces carbon dioxide emissions, every ton of emissions reduced results in the creation of one carbon credit. Project developers can then sell these credits to finance their projects. There are hundreds of different types of carbon reduction projects. For example, a dairy farm can install an anaerobic digester to capture and destroy methane that would otherwise be released when animal manure decomposes.

Emission Reductions

However, such anaerobic digester projects are typically expensive to install and maintain. In order to finance the construction and operation of a digester project, a dairy farm can sell the emission reductions in the form of carbon credits. Carbon credits are therefore an available tool for individuals and organizations that wish to mitigate the impact of their own carbon footprints.

How are Carbon Credits Generated?

Emission reduction projects reduce the amount of greenhouse gases in the atmosphere in one of three ways. By capturing and destroying a greenhouse gas that would otherwise be emitted into the atmosphere. An example of this is a methane gas capture project at a landfill. By producing energy using a clean, renewable resource that eliminates the need to produce that same energy from fossil fuels, the burning of which releases greenhouse gas into the atmosphere. An example of this is wind power.

Healthy Growth and Maintenance

By capturing and storing greenhouse gases to prevent their release into the atmosphere. An example of this is a project that promotes the healthy growth and maintenance of forests. Some projects include more than one of these activities at the same time. For example, gas capture projects at landfills not only prevent the release of methane gas into the atmosphere, but they also use the captured methane to generate electricity that would otherwise be generated by burning fossil fuels such as coal or natural gas.