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Carbon Markets 101:

Carbon Insettings vs. Carbon Offsetting


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Anne Fairfield-sonn

What is Carbon Offsetting? 

Companies buy carbon credits from programs that help to improve the environment. A carbon credit is a financial unit of measurement that allows companies and individuals to contribute towards a low-carbon future.

Each carbon credit that is sold helps organizations contribute to reducing carbon emissions as part of a larger project. Once a carbon credit has been used, it’s removed from carbon registries. To make an impact annually, organizations will need to purchase carbon credits each year to offset their carbon footprint.

Carbon dioxide has the same impact on the climate no matter where it is emitted. Carbon offsetting helps promote offsetting the emission of carbon from product development. By supporting an activity that helps reduce an organization’s carbon footprint, they’re giving back to the environment.

For organizations interested in carbon offsetting, they are able to purchase carbon credits which help cancel out the impact of some of their projects. A carbon credit is the certificate that a practice has removed 1 tonne of carbon dioxide from the atmosphere.

In agriculture, a carbon credit is generated through broad adoption of farm management practices that replenish the soil and help trap carbon in the ground, meaningful reductions in greenhouse gas emissions, and improvements in soil-based carbon sequestration.

What is Carbon Insetting? 

A carbon inset is when an organization invests in sustainable practices within its own supply chain. carbon insets support the implementation of practices that sequester carbon, promote climate resilience, protect biodiversity, and restore ecosystems. For agriculture, carbon insetting means prioritizing regenerative agriculture which helps to reduce carbon emissions and build resilience across organizations’ supply chains.

In regenerative agriculture, carbon insetting is when farmers choose practices that lead to carbon sequestration and a reduction in greenhouse gas emissions. Practices like low and no-till, cover cropping and precision nitrogen application all contribute to higher carbon insetting.

Farmers represent a vast number of small enterprises, each having its own carbon footprint. In order to successfully build carbon insetting into a large number of growers, a scalable solution is necessary.

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