Q: What are Carbon Credits?

A: A carbon credit represents ownership of the equivalent of one metric ton of carbon dioxide that can be traded, sold or retired. If an organization is regulated under a cap-and-trade system (e.g., the California Cap and Trade Program) it likely has an allowance of credits it can use towards its cap. If the organization produces fewer tons of carbon emissions than it is allocated, the organization can trade, sell or hold the remaining carbon credits. When a credit is sold, the buyer is purchasing the the seller’s allowance of emissions.

Q: What are Carbon Offsets?

A: A carbon offset also represents a real reduction of carbon dioxide in the atmosphere and results in the generation of a carbon credit. The difference from a carbon credit is that the credit is generated as the result of a project with clear boundaries, title, project documents and a verification plan. In most cases, carbon offsets generate reductions outside of the organization and, more importantly, outside of any regulatory requirement. Common projects include building wind farms, supporting truck stop electrification projects to reduce tailpipe emissions, and planting trees or preserving forests.

Q: What is a carbon sink?

A: Carbon sinks are areas of vegetation (e.g., forests, grasslands, croplands, wetlands) that absorb more carbon dioxide and other greenhouse gases than they emit.

Q: What is Cap-and-Trade?

A: In a cap-and-trade carbon market, governments place a cap on GHG emissions that may apply to the whole economy or to specific segments such as refineries or power plants. In such compliance markets, the cap often declines yearly since the goal is to reduce emissions over time. One example is the California Cap-and-Trade Program which is part of the state’s overall strategy to reduce total GHG emissions to pre-1990 levels. About 450 businesses that are responsible for 85 percent of the state’s total GHG emissions are required to comply, including large electric power plants, large industrial plants, and distributors of fuels such as natural gas and petroleum.

Q: What project standards do I need to follow to develop carbon credits?

A: A terrestrial sequestration or emission reduction project is implemented on a specific tract of land. The sequestered amount of carbon or reduced emissions is measured, verified, monitored and reported according to specific guidelines and protocols for either a voluntary registry or trading system.

Q: What is a carbon footprint?

A: When tribal governments, enterprises, members and employees use energy or products made with fossil fuels, they generate carbon dioxide and other greenhouse gases (GHGs) that contribute to climate change. The combination of emissions containing carbon caused by work, home, transportation and daily life is called a ‘carbon footprint.’

Q: What is the Carbon Cycle?

A: The carbon cycle is the circulation and transformation of carbon back and forth between living things and the environment. Carbon is an element, something that cannot be broken down into a simpler substance. Other examples of elements are oxygen, nitrogen, calcium, iron, and hydrogen. Carbon compounds are present in living things like plants and animals and in nonliving things like rocks and soil. Carbon compounds can exist as solids (such as diamonds or coal), liquids (such as crude oil), or gases (such as carbon dioxide). Carbon is often referred to as the “building block of life” because living things are based on carbon and carbon compounds.

Q: What land management practices promote terrestrial sequestration?

A: Practices that support terrestrial carbon sequestration include habitat restoration, reforestation, and no-till farming. Terrestrial sequestration is emerging as a viable business opportunity for landowners and offers an immediate response to the threat of global climate change.

Q: What is CO2?

A: Carbon dioxide (CO2) is a gas composed of one atom of carbon and two atoms of oxygen. CO2 occurs naturally in the atmosphere, is essential to plant life and, as a greenhouse gas (GHG), helps create the greenhouse effect that keeps our planet livable. CO2 is exhaled by humans and is used to put the bubbles in
 soft drinks, as a coolant (dry ice), and in fire extinguishers.

Q: What is terrestrial sequestration?

A: Terrestrial sequestration is a process that captures and stores carbon dioxide (CO2) in vegetation and soil within a few feet of the Earth’s surface, providing them with the components they need to live and grow and reducing CO2 in the atmosphere. During photosynthesis, carbon from atmospheric carbon dioxide is transformed into components necessary for plants to live and grow. As part of this process, the carbon present in the atmosphere as carbon dioxide becomes part of the plant in a leaf, stem, or roots, and the carbon is sequestered for a long period of time. Once the tree dies, or as limbs, leaves, seeds, or blossoms drop from the tree, the plant material decomposes and the carbon is released.