What are the different "colours" of carbon?
Carbon offset can be categorized using a color-coded classification system based on the application of carbon capture management techniques. The colored carbon credits are further broken down into two categories: industrial offsets (brown, red, yellow) and nature-based solutions (blue, teal, green).
- Brown carbon offsets are generated by increasing efficiency in industrial practices such as energy efficiency, landfill carbon capture, and fuel switching.
- Red carbon offsets use innovative technologies to reduce emissions.
- Yellow carbon incorporates the benefits of renewable energy projects.
- Green carbon projects protect, restore, or enhance the natural terrestrial vegetation to sequester carbon through the growth of new biomass (eg tree planting), or avoided destruction of forests or other habitats.
- Blue carbon projects sequester atmospheric carbon in marine habitats, including vegetation such as mangrove trees or seaweeds, and sediments.
- Teal carbon projects include freshwater ecosystems such as peat swamps, but the term is rarely used. Instead, projects in freshwater ecosystems are generally included under the umbrella of green terrestrial projects.
Green and Blue carbon are referred to frequently in articles or conversations about credits or offsets, while the others are seen less often.
What are Nature-Based Solutions?
Nature-based solutions are the sustainable management of natural resources to combat environmental problems such as food security, water quality, biodiversity loss, and natural disaster risks. Natural carbon sinks such as forests, mangroves, and peat swamps sequester more carbon than they emit, making them a long-term nature-based solution to climate change. Compared to offsets through changes in industrial practices, nature-based solutions have more co-benefits for the environment and local communities.
Measuring and monetizing carbon storage from ecosystem protection and restoration provides communities with economic incentives to conserve local ecosystems. They offer a 20-plus year source of income to supplement or replace traditional philanthropic or government funding sources and a sustainable income alternative to extractive or destructive practices. For commercial organizations wanting to produce verified carbon credits for sale or to offset their own carbon footprints, nature-based carbon projects can compound multiple benefits into one credit.
What are co-benefits, and how do they affect credit value?
Some activities, such as planting trees, may have additional positive effects - commonly termed co-benefits - like creating wildlife habitats. Others, such as constructing a dam to produce hydroelectric, may avoid the emissions of GHGs by replacing coal-fired power plants but can also interfere with migratory fish and affect the health of entire river systems. Both activities reduce GHGs but have different positive and negative impacts on their environments. They have different costs and funding sources. One generates additional income from power production, while one doesn't.
As a result, the value of the credits will be understandably different.
Projects which appear similar at first glance may also be significantly different. A tree-planting project which plants nothing but pine trees in straight lines will be effective at removing CO2 from the atmosphere but will not support wildlife and biodiversity.
A tree-planting project that plants various native species in an area of former forest and slowly restores that forest back to a natural state - ecosystem restoration - will have the co-benefits of supporting greater wildlife and biodiversity.
The credits generated by each project should be priced differently; however, it is often up to the purchasers of credits to spot the difference and decide whether the asking price is justified.
