Environment – What are carbon credits?

The carbon credit industry has exploded over the last decade. It’s helped fund some genuinely amazing projects like large-scale reforestation and clean energy, but it’s also opened the door to a fair bit of greenwashing. So, what’s the deal with carbon credits?

In simple terms, a carbon credit is like a certificate that represents one tonne of carbon dioxide being removed, reduced, or avoided in the atmosphere. That credit can then be sold to someone else (often a company) to “offset” their own emissions.

For example, a business that emits one tonne of carbon might buy a credit linked to a forest that’s sequestering that same amount of carbon over time. Tree planting is a classic example, but credits can also come from wind farms, landfill gas capture, energy efficiency schemes, anything that reduces emissions.

• But not all credits are created equal. If you’re looking to offset, here are a few key questions to ask:
• Is the project third-party certified (e.g. Gold Standard)?
• Can you easily find out where your money is going?
• Is the project long-term, regenerative, and local?
• Is it registered and independently verified?
• Is there something more preventative and direct you can do to reduce the emission output instead of having to offset it?

In Aotearoa New Zealand, the Emissions Trading Scheme (ETS) is our domestic carbon market. Emitters must buy New Zealand Units (NZUs), and landowners who sequester carbon, can earn and sell NZUs.

Take Air NZ’s flight offsetting programme. It’s third-party certified through Gold Standard and Toitū, which verifies the emissions data. Their website is transparent: half of their offsets are bought via CHOOOSE (an international platform), and the other half funds native tree planting through Trees That Count – long-term, regenerative projects focused on restoring biodiversity in Aotearoa.

But let’s be clear: offsetting doesn’t excuse pollution. We need to cut emissions, not just cancel them out. Carbon credits are a helpful stopgap while we wait for better solutions but they’re not a free pass.

I learned a lot of this while doing research for our local sustainability guru and Coastie, Ethically Kate. On her website, you’ll find a longer in-depth blog with more offsetting recommendations.

https://ethicallykate.com