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A nationwide effort is required to make sure business practices, new construction or old, and supply chains for everything in between are sustainable. Everything from the worldwide agricultural system to the light bulb in your desk lamp is part of the fight for Net Zero carbon emissions.
Let’s take your light bulb for an example. The light bulb is receiving energy from your local utility’s transmission system, the electric wires, but you or your business could choose to install a renewable energy source like rooftop solar panels. In doing so, you’re directly eliminating a combustion source of power and adding renewable energy to the system. This is a Scope 1 emission.
Scope 1 emissions are things that you and your business have direct ownership over. Other things in Scope 1 to consider include plug-in hybrid and battery electric vehicles and electric machinery for your product if you use combustion engines currently.
There are also Scope 2 and Scope 3 emissions that you or your business will have less control over. Despite a lack of control over Scope 2 and 3 emissions, there are still choices you can make to benefit the planet. You could choose to purchase a lightbulb in cardboard packaging that is easily recyclable, instead of plastic or styrofoam. You could use your energy supplier to purchase more wind and solar energy for the light bulb, and you could turn it off or dim the bulb at peak times.
Other ways to eliminate Scope 3 emissions include encouraging your employees to work remotely, or when travel is necessary, encouraging energy-efficient forms of transportation like bicycles and public transit over personal vehicles. All of these choices, big and small, are critical in the fight to save our planet, and they’ll add up over time.
There’s another way to add into this positive feedback loop: a carbon credit. So what is a carbon credit, and does it actually work to make the planet greener?
A blog post from the United Nations Development Programme says, “Carbon markets are trading systems in which carbon credits are sold and bought. Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.”
In a way, a carbon market is like a stock market. By purchasing a carbon credit, you’re investing in a company to help them grow their sustainability program and make Scope 1 changes that will lead to more credits and more sustainable changes. So instead of purchasing a small portion of ownership in a company, you’re purchasing a portion of a company’s behavior that will direct a more sustainable future.
Like a stock market, these carbon credits can be bundled together, like an ETF, and sold. In fact, a company called Watt Carbon does exactly that with their Energy Attribute Certificates. This second-hand market is extremely common, and this is how most credits are sold. However, issues abound in an unregulated second-hand market.
“There are…serious concerns including issues related to double-counting of GHG emission reductions, human rights abuses, and greenwashing (in which companies falsely market their green credentials, for example),” says the UN Development Programme.
It’s critical to understand where exactly a carbon credit comes from for it to be effective in the fight against climate change. Is the credit from a Scope 1, 2, 3, or even Scope 4 emission? Do you trust the company you are purchasing from? Are there any public audits of their carbon credits? Do they regularly perform audits?
If you know and trust a company’s carbon credits, it’s just a small way to make a big change on a company’s margins. By investing in their sustainability program, a company can circulate your investment and turn into even larger gains toward Net Zero.
