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Emissions Blog Posts
The concept of emissions management progressed from the realm of the environmentalist through society to the business board room. The progressive organizations are shifting away from traditional business to adopt sustainability.
Carbon Offset
Voluntary and Compliant – a Carbon Offset Definition
The concept of carbon offsets has been around for some time and is generally attributed as a reaction to the famous Kyoto Protocol, which established standards to address climate change. When someone is looking for a carbon offset definition, it is important to understand that there are two distinct types, generally known as voluntary or compliant.
We have seen that it is often “hip” to be green and while our overall interpretations of the threats posed by greenhouse gas emissions and climate change are in themselves changing, in relatively recent times organizations and individuals sought the power of reputational conformity as they dabbled in the world of carbon offsets.
A carbon offset definition reveals that these are vehicles to allow individuals or organizations to purchase reductions in greenhouse gas emissions. In the voluntary market, these offsets are actively traded back and forth and there has been significant criticism leveled at the entire concept.
It is said that the overall market lacks any guidance, standards or transparency and that participation was being used to make outrageous claims about “carbon neutrality,” even though those who were purchasing the offsets were not in effect making any significant moves to actually reduce their own carbon emissions at source. It must be remembered that voluntary offset purchases represent, in effect, payments to someone else to reduce emissions.
Voluntary Carbon Offset
The voluntary market has grown considerably in recent years despite, or maybe because of allegations about “greenwashing”. The Chicago Climate Exchange is a primary example of an over-the-counter market where participants make voluntary commitments to reduce their emissions. The market is very fragmented and is of questionable efficiency when compared to a compliance market as established by the Kyoto Protocol and as illustrated by the EU-ETS and the topical Carbon Reduction Commitment in the United Kingdom.
Detractors maintain that the voluntary carbon offset market takes away from the core mission and that the lack of transparency muddies these waters, effectively. As such, modifications are now in place to make sure that offsets are verifiable, additional, sustained, permanent, specific, timely, enforceable and trackable.
Debates Over Carbon Offset Definition
Most will agree that the voluntary carbon offset market has made a contribution to the overall problem, but it seems that as regulatory measures increase, the demand for a voluntary market may decrease.
It seems certain that the implementation of regulated cap and trade markets, now being debated at legislative level within the United States, will seek a carbon offset definition that may force additional transparency within the voluntary arena. It falls to regulators to hone this definition and to ensure that an essential trading platform for exchange is established to reward both those who have pure environmental thoughts and those who support greenwashing.
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