Accounting for the Unaccounted: The Carbon Externality

carbon offsetting

Accounting for the Unaccounted: The Carbon Externality

Individuals and companies alike produce carbon through a number of different ways, such as shipping finished goods or even something as simple as purchasing a muffin.  Nearly every interaction a person or company is involved with results in the production of carbon one way or another. However, in many instances, the negative costs of carbon production that are related to these actions are overlooked and are not incorporated into the cost of those actions.  

What is Carbon Offsetting?

Fortunately, the process of carbon offsetting accounts for the negative externalities associated with carbon production.  offsetting scaleThis is achieved by reducing carbon emissions through investment in projects that keep carbon out of the atmosphere or outright remove carbon from the atmosphere.  For instance, if a bakery realizes they produce two tons of carbon per month by operating their oven, they may invest in two carbon credits.  The money from those carbon credits would then be reinvested into different carbon mitigating projects, like wind or solar energy development.  By purchasing the credits, the bakery successfully reduced their carbon footprint and accounted for the externality they created when using the oven.  Now, with a better understanding of carbon offsetting, one might begin to wonder how a company would purchase carbon credits.

Carbon Credit Capital 

If a company or individual desires to offset their carbon production and work towards carbon neutrality, an offset management firm, like Carbon Credit Capital (CCC), would help guide them in the right direction.  According to Carbon Credit Capital's director of business development, Reed Shapiro, one way CCC is responsible for providing individuals and businesses with the opportunity to reduce carbon emissions is through investment in carbon credits.  By purchasing the carbon credits provided by CCC, the customer is in turn reducing his or her carbon footprint while also investing in green projects.  This creates a range of benefits for both individuals and businesses.  

The Business Benefits

In many cases, businesses can raise their bottom lines by vamping up their public relations.  This is where some of the greatest benefits for companies to invest in carbon neutrality lie.  By becoming carbon neutral, companies project the image that they are concerned with the health of the environment, which improves the perception of the company.  Being carbon neutral conveys responsibility and the notion that the company is involved in promoting a more sustainable future.  gold carbon badgeAdditionally, Carbon Credit Capital can help improve the transparency of a company's line of production in quantitative measures.  By incorporating different badges that signify differing levels of sustainability, CCC offers companies the option to market their responsible practices.  As well as incentives for companies to get involved in carbon offsetting, there are many benefits for individuals. 

The Individual Benefits

While the benefits for the individual are less diffuse than the benefits for a company, there are still significant advantages for individuals to get involved in carbon offsetting.  One of the major benefits of carbon offsetting for the individual is the ability to actually become carbon neutral.  Without investing in carbon credits, it is very unlikely that a person can comfortably live a carbon neutral lifestyle.  So, purchasing carbon credits allows a person to live a net zero carbon life without making drastic changes to their behavior.  Even at the individual level, making such changes can have immediate and lasting effects.

The Impact

carbon neutralityThe transition away from fossil fuels and towards renewable and clean energy is inevitable as the dynamic of the economy changes.  An economy that was once accustomed to unsustainable practices is being replaced with a more green one.  There is little room for Luddites, and the companies that fail to embrace the changing dynamic will prove to fare the worst.  By investing in carbon offsetting, companies and individuals can be at the forefront of the transitioning economy.  In reducing their carbon footprints, companies and individuals will effectively raise their bottom lines while simultaneously reducing the amount of greenhouse gases they contribute to the atmosphere.  So, where will you wind up in this changing economy?