How Carbon Credits Can Save Trees and the Planet

How Carbon Credits
can save Trees
and the Planet

Photo: weeterzy from Pexels

The Earth is home to just over 3 trillion trees, half of them living in tropical or subtropical forests. When you add the human population into the equation, you see that this equals out to roughly 400 trees for every person on the planet. Trees not only give us important by-products, but preserve biodiversity, maintain water quality and act as essential parts of any ecosystem. They also draw huge amounts of carbon dioxide out of the air, storing up to 45% of all carbon on land.

In the seminal 2015 Paris Agreement on climate, the world committed to holding global warming below 2 degrees Celsius by 2100 and “pursuing efforts to limit” warming to 1.5 degrees. To stay on track with this important climate target, greenhouse gas emissions need to be cut by 45% by 2030, compared to 2019 levels. One of the best ways to reduce these harmful emissions is by planting and protecting forests so that the trees can do their important job of removing CO2 from the air.

A Net-Zero Planet means

taking swift, drastic Action

When we talk about climate change, 1.5 degrees Celsius is the magic number to remember. This is the maximum amount that scientists believe the global temperature can rise by 2100; any more would be catastrophic for our planet.


To achieve this, we’ll not only have to double down on the strategies that have been proven effective but also explore novel, radical solutions too. This will mainly be driven by two things: A steep reduction in fossil fuel dependence and increased climate mitigation measures, such as restoring ecosystems and planting forests.


Limiting the rise of global temperatures to 1.5 degrees Celsius will require a rapid, drastic reduction in net greenhouse gas emissions across all industries, including gaming. The gaming industry and many others can achieve much of the necessary reduction by adopting new technologies, energy sources and operating practices. For business leaders, this signals a “race to the top” through increasingly ambitious commitments to reduce the climate footprint attached to their corporate activities: from manufacturing and services to flying, construction and infrastructure.


It will also mean the use of carbon credits to supplement their efforts to achieve net-zero emissions.

Global temperature anomaly (oC compared to the 1951-1980 average). The long-term global warming trend is largely due to human activities that have increased emissions of carbon dioxide and other greenhouse gases into the atmosphere.

Source: NASA Earth Observatory.

How Carbon Credits can

accelerate the Race to Net-Zero

Carbon credits (often referred to as “offsets”) have an important dual role to play in the battle against climate change. They enable companies to support decarbonization beyond their own carbon footprint, thus accelerating the broader transition to a lower-carbon future. They also help finance projects for the removal of carbon dioxide from the atmosphere, which is needed to neutralise residual emissions that will persist even under the most optimistic scenarios for decarbonization.


A carbon credit is a certificate representing one metric ton of carbon dioxide (CO2) or its equivalent that is either prevented from being emitted or removed from the atmosphere by a carbon reduction project.


To generate carbon credits, these projects need to demonstrate that the achieved greenhouse gas reductions or removals are real, measurable, permanent, independently verified, and unique.

Carbon credits are certificates representing quantities of greenhouse gases that have been kept out of the air or removed from it.

If a project meets these criteria — as specified by independent standards such as Gold Standard and Verified Carbon Standard (VCS) — credits can be issued. The impact of a carbon credit can only be claimed — that is, counted toward a climate commitment — once the credit has been retired (cancelled in a registry), after which it can no longer be sold.

Creating Consensus about the proper Use of Carbon Credits

There are some who are sceptical about carbon credits as an effective decarbonization measure. Some observers question whether companies will extensively reduce their own emissions if they have the option to offset emissions instead.


Companies would benefit from clear guidance on what would constitute an environmentally sound offsetting program as part of an overall push toward net-zero emissions. Principles for the use of carbon credits would help ensure that carbon offsetting does not preclude other efforts to mitigate emissions and does result in more carbon reductions than would take place otherwise.


Under such principles, a company would first establish its need for carbon credits by disclosing its greenhouse gas emissions from all operations along with its targets and plans for reducing emissions over time.


To compensate for emissions from sources that it can eventually eliminate, the company might purchase and “retire” carbon credits (claiming the reductions as their own and taking the credits off the market, so that another organisation can’t claim the same reductions). It could also use carbon credits to neutralise the so-called residual emissions that it wouldn’t be able to eliminate in the future.

Purchasing carbon credits is one way for a company to address emissions it is unable to eliminate.

The 4 Types of Carbon Credits

Each credit has attributes associated with the parent project, such as the type of program or the region where it was carried out. These attributes affect the price of carbon credits, which can be divided into four categories:

  1. Avoiding nature loss (including deforestation), while not the cheapest offset option, is often chosen for the many benefits outside of the carbon credits offered. Protecting ecosystems, wildlife, and social heritage are significant for companies offsetting their carbon emissions for the corporate social responsibility (CSR) element.

  2. Nature-based sequestration occurring through reforestation and forest conservation. These are very popular offsetting schemes, with credits created either through carbon captured by newly planted trees or the carbon not released through protecting old trees.

  3. Avoidance or reduction of emissions from activities that prevent the release of greenhouse gases into the atmosphere in the first place. Examples include the introduction of sustainable energy sources in households, limiting timber harvesting levels or stopping the conversion of grasslands to croplands.

  4. Tech-based removal of CO2 using machinery that enhances natural removal or manually pulls it out of the atmosphere, where it is then stored in geological reserves. To get a net removal benefit, the captured carbon must be stored long-term.

The Challenges of sourcing

trustworthy Carbon Credits

Overall, the market is characterised by low liquidity, scarce financing, inadequate risk management services and limited data availability. High-quality carbon credits are scarce because accounting and verification methodologies vary and credits’ co-benefits (such as community economic development and biodiversity protection) are seldom well-defined.


When verifying the quality of new credits—an important step in maintaining the market’s integrity—suppliers endure long wait times. When selling those credits, suppliers face unpredictable demand and can seldom fetch economical prices.


These challenges are formidable but not insurmountable. Verification methodologies could be strengthened, and verification processes streamlined. Clearer demand signals would help give suppliers more confidence in their project plans and encourage investors and lenders to provide better financing.


This can all be achieved through the careful development of an effective, large-scale voluntary carbon market.

The voluntary Carbon Credit Market

offers an ideal Solution

A carbon credit is considered “voluntary” when it is bought and retired by choice rather than as part of a mandatory process of compliance. While carbon credits have been in use for decades, the voluntary market for carbon credits has grown significantly in recent years.


McKinsey estimates that in 2020, buyers retired carbon credits for some 95 million tons of carbon dioxide equivalent, more than double the 2017 amount. As efforts to decarbonize the global economy increase, demand for voluntary carbon credits could continue to rise.


The proceeds from the sale of voluntary carbon credits enable the development of new carbon reduction projects. These include renewable energy and avoiding emissions through fossil fuel alternatives. It also includes natural climate solutions like reforestation, avoiding deforestation, promoting agroforestry, energy efficiency measures and resource recovery.


A robust, effective voluntary market for carbon credits would make it easier for companies to locate trustworthy sources of carbon credits and complete the transactions for them. Just as importantly, such a market would be able to prove demand, thus encouraging sellers to increase supply.


By enabling more carbon offsetting to take place, a voluntary carbon market would support progress toward a low-carbon future. However, while the voluntary carbon credit market is currently experiencing significant momentum, it is still relatively small. Encouraging more attention and interest would accelerate the growth of this solution to climate change.