first things first | current market | need convincing | mandatory when
First things first - what exactly is a carbon credit?
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The current carbon credits market
The global carbon credits market is divided into 2 streams: voluntary and mandatory. At present, only the voluntary market is in place within Australia, but that's set to change in July 2011 with the introduction of the mandatory Carbon Pollution Reduction Scheme (CPRS) . Voluntary offsetting Given the turmoil in the global economy over the past 24 months and the widespread reigning-in of spending by companies across most sectors, it would be logical to assume that businesses would regard voluntarily offsetting their carbon emissions as something to avoid spending money on, instead focusing their slimmed budgets on traditional activities more aligned to boosting their bottom line. However, the truth is that an ever-increasing number of businesses - large and small - in Australia are actively participating in the voluntary carbon credits market, either through a genuine desire to take their environmental responsibilities seriously, or by recognising the obvious reputation, branding and general PR benefits such activity brings with it. You only have to look at the rise of green oriented high profile advertising campaigns by financial and energy companies in particular to see how these large companies are utilising their association with green issues and the concept of the 'carbon footprint' to their advantage. Indeed, the actual term 'carbon footprint' was arguably first brought to the attention of the mass audience by the Anglo Dutch energy giant BP in a 2005 global advertising and PR drive based around the concept. back to top Need convincing about the benefits of voluntary offsetting? Consider this... Imagine suddenly being forced to carry out an activity within your day-to-day business that has a significant impact on the profitability (or otherwise) of your organisation, yet you have no knowledge or experience whatsoever of how to do it. It's a situation many companies who delay offsetting their carbon footprint up until the day the legislation kicks in will find themselves in - a day which will definitely arrive for all businesses in the near future. Companies who act now and voluntarily offset their carbon footprint will gain a considerable advantage and reap the benefits when the legislation arrives, simply by having an established set of protocols and provisions within their business model to accommodate the requirements of the law. Voluntarily offsetting your company's carbon footprint today will help future-proof it from the effects of the upcoming legislation - and using an experienced broker will give you a significant head start. Get an advantage over your competitors by buying carbon credits voluntarily - contact us today. Mandatory offsetting As touched on before, mandatory markets are dictated by the government within a country, and/or the administrative body within the regional union. Emissions Trading Schemes are developed to reduce emissions and encourage the development of cleaner energy projects and practices. Within Australia specifically, the CPRS scheme that's currently being developed will involve the placing of restrictions ('caps') on the amount of carbon emissions a company can produce. The caps will be industry-specific, with high producing industries being the first to be affected under current proposals. Businesses within affected industries that exceed their caps (i.e. those companies which produce more carbon than they're permitted to under the defined limits within a certain timeframe), will have to source and purchase an equivalent number of credits to match the amount by which they exceeded their cap, thereby offsetting their excess emissions. Companies that fail to comply to their offset obligations will be subjected to severe penalties that will amount to considerably more than the cost of complying. Example: Business X (a transport company) is allocated a 100 tonne cap limit for their carbon emissions for the year. This means they'll not be allowed to exceed this figure for the year whilst operating their business. The government then places an emissions cap of 80 tonnes on their sector, meaning that Business X has to source and purchase 20 carbon credits to offset their excess emissions under the scheme within their sector. On the other side of the coin, companies that produce less than their target emissions limit can sell their carbon credits - often for a profit. Talking to a specialist broker such as Brand Carbon about selling your carbon credits can help you get the best price and maximise your profit potential. back to top When will the mandatory scheme come into force? Although it's currently a hot topic of political debate, and the final shape and scale of legislation is yet to be fully defined, the Australian government is working hard towards having a mandatory carbon capping scheme in place by July 2011. Initially applying only to the high-end carbon emitting sectors, this upcoming domestic carbon trading scheme will mark a significant turning point for industry and commerce in Australia, due to our current heavy reliance on 'dirty' energy, such as that generated by coal-fired power stations. It's thought that the energy, mining and transport sectors will be the first to fall under the Australian scheme, with a progressive rollout across other sectors soon after. Keep checking back on our website for news updates as the mandatory legislation develops. Want to offset your company's carbon emissions? Contact us today. Buy carbon credits with Brand Carbon Whether buying carbon credits voluntarily or mandatorily, the benefits of using an impartial specialist broker such as Brand Carbon are extensive. Find out more about how carbon brokers can add real value to your carbon offset strategy here. back to top Brand Carbon - Your Carbon Solution Brokers |