Business FAQ

Carbon Basics

What is Climate Change?

Climate Change, also referred to as Global Warming, is the gradual increase in global average temperatures, leading to less stable weather, unreliable rainfall, and more severe weather events. This will have far-reaching impacts on health, water supplies, agricultural production and natural ecosystems. It will also increase the level of damage to people and property, and therefore increase insurance costs, as fires, floods and storms become more severe. 

Climate Change is caused by the rising level of greenhouse gases in our atmosphere. Whilst natural processes have caused these levels to fluctuate slightly over millions of years, the activities of humankind in the last few centuries have caused an unprecedented increase in greenhouse gas emissions, with severe consequences for our climate. Acting now is our best chance to slow climate change.

What are Greenhouse Gases?

Greenhouse gases (GHGs) is a collective term for a group of gases that trap the sun’s heat in the earth’s atmosphere, rather than letting it radiate back into space. This warms the planet in the same way that the glass panes of a greenhouse trap heat and warm the air inside, hence the common term ‘the greenhouse effect’. The main greenhouse gases are water vapour, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and Ozone (O3).The greenhouse effect is fundamentally a good thing, since in the absence of greenhouse gases there would be no life on earth.

 However, the rapid increase in greenhouse gas emissions resulting from human activity – primarily burning fossil fuels and destroying forests – is increasing the level of greenhouse gases in the atmosphere above its historical equilibrium, causing climate change.

What are carbon emissions?

There is a finite level of carbon on earth. It is stored in three places - the atmosphere, the biosphere (soil and vegetation), and the oceans. As plants grow they absorb carbon (in the form of carbon dioxide) and when they die they release it back into the atmosphere, where it is taken up by new plants in the oceans or on earth. There is a natural dynamic cycle that has continued to operate within a steady spectrum for over half a million years. 

What we have done as humankind is to pump out unusually large amounts of carbon dioxide by burning fossil fuels to meet our growing population’s insatiable demand for energy. In addition, we have cleared vast areas of forest to make way for agriculture and development and to use for fuel, timber and paper products. All this has caused the natural cycle to get out of sync. Huge quantities of carbon from fossil fuels that took hundreds of millions of years to be produced have been released back into the atmosphere over just 150 years, and the rate at which this is happening continues to accelerate. The resulting build up of carbon dioxide in the atmosphere is increasing the greenhouse effect and causing climate change. Human activities also create emissions of other greenhouse gases (e.g. methane emissions from landfill and livestock farming, nitrous oxide emissions from fertilizer use, CFCs and HCFCs from industrial processes).

However, carbon dioxide is by far the most prevalent and is also used as the benchmark measure. Emissions of other greenhouse gases are always converted into tonnes of carbon dioxide equivalent (tCO2e) based on their relative efficiency in trapping heat and hence contribution to climate change. As a result ‘carbon’ and ‘carbon emissions’ have become common shorthand terms for all greenhouse gas emissions.

What is a carbon footprint?

A 'carbon footprint' is the calculation of the total carbon emissions resulting from the activities of an individual, business or organisation over a given period. These activities are likely to include electricity and other fuel use, surface and air transport, paper use, waste disposal, food consumption, etc. A carbon footprint can also be calculated for the lifecycle (production, use and disposal) of a particular product, or the provision of a particular service. 

Climate Friendly’s online calculators for home and work enable you to work out your carbon footprint. We can also provide customised carbon footprint calculators for business and other organisations. 

All of our footprint calculations are based on best-practice methodology and up-to-date emission factors from the most reputable sources. Measuring your carbon footprint enables you to identify opportunities for reducing your emissions at home and work, and to track progress over time.

How can we reduce our carbon emissions?

Almost all of the actions you take - driving your car, turning on the lights, using your computer - generate carbon emissions. The most effective way we can reduce our emissions, and thus help to prevent climate change, is to simply use less energy. In some situations we can also choose to use renewable energy, to use less energy-intensive products, and to create less waste. Climate Friendly has loads of tips on how you can reduce emissions at home or at work

However, no matter how hard we try, it is impossible for us to reduce our emissions to zero. That’s where carbon credits come in - to offset the emissions we cannot avoid with emissions saved elsewhere. 

Climate Action = Emission Reductions + Quality Offsets.

Carbon Calculators

How do Climate Friendly's emission calculators work?

Climate Friendly’s online and internal emission calculators quantify the greenhouse gas emissions associated with a wide range of day-to-day activities. 

Our dedicated Technical Team's role is to monitor international developments and latest science to ensure that our calculations are up-to-date and reflect best practice internationally. 

The emission factors are selected from respected and well recognised publicly available sources such as the Greenhouse Gas Protocol, the International Panel on Climate Change (IPCC), the UK Departments of Environment Food and Rural Affairs, and Energy and Climate Change (DEFRA/DECC), and the Australian Department of Industry, Innovation, Climate Change, Science, Research, and Tertiary Education (DIICCSRTE).

How do Climate Friendly's flight emission calculators work?

The combustion of fuel in aircraft engines creates emissions of carbon dioxide (CO2), the primary greenhouse gas (GHG) responsible for climate change. Over and above these base CO2 emissions, air travel creates additional direct emissions including water vapour, nitrous oxides and particulates, as well as further indirect impacts resulting from the formation of contrails and cirrus clouds and the release of emissions at high altitude.  

Climate Friendly calculates emissions from flights using the most up-to-date methods and assumptions from the most reputable international scientific sources.  

Firstly we calculate the CO2 emissions from the fuel used, using emission factors published by DEFRA. The factors are differentiated by seat class (economy, premium economy, business or first class) and by journey length (short-haul, medium–haul and long-haul), since both of these affect the amount of fuel used per passenger kilometre.  

Secondly we make an adjustment for the indirect and non-CO2 effects of flying, including the impact of releasing emissions at high altitudes. This entails applying a multiplier (known as the Radiative Forcing Index or RFI) to the base CO2 emissions in order to give a final emission value which accounts for the full global warming impact of flying. 

For carbon dioxide the global warming impact is well-understood and can be calculated relatively accurately. The additional indirect and non-CO2 effects are considered to be highly significant for the overall impact of aviation. However, the processes are complex and there is greater uncertainty within the scientific community around their precise quantification. The most in-depth and widely cited study was published by the IPCC in 1999, and suggested that in order to account for the non-CO2 effects, the CO2 emissions should be multiplied by a Radiative Forcing Index (RFI) of 2.7. Subsequent studies have made estimates ranging from 1.9 to 4.7. Climate Friendly uses a default RFI multiplier of 2.7 based on this research. Differences in the RFI value used are the primary reason for variation in the values obtained using different flight emission calculators. 

The Climate Friendly technical team regularly reviews our calculation methods to make sure they use the latest published emission factors and the latest science. As new information and broader consensus emerges we will continue to update and refine our calculators.

What offsetting options does Climate Friendly offer?

Full global warming impact   

Flying has a greater environmental and atmospheric impact than just the CO2 emissions from burning fuel. This is due to the effects of additional emissions such as water vapour, nitrous oxides and particulates, as well as further indirect impacts resulting from the formation of contrails and cirrus clouds and the release of emissions at high altitude. These effects are accounted for by applying a multiplier known as the Radiative Forcing Index (RFI) to the base CO2 emissions. For further detail see “How do Climate Friendly’s flight emission calculators work?” above. 

Our recommended approach, and default option for customers, is to offset the full global warming impact of flying, including the indirect and non-CO2 effects. Whilst there remains some degree of uncertainty about the magnitude of these effects, the RFI value that we use reflects the best available information, and this approach is consistent with the precautionary principle that we should take action even if we don’t know all of the answers with absolute precision.  

Fuel-only emissions   

We also offer our corporate and online customers the option to offset only the direct CO2 emissions. Web customers can do this by deselecting the “Offset Full Global Warming Impact” box in the flight emission calculator. 

Carbon Credit Types

What is the VCS?

The Verified Carbon Standard (VCS) is the most widely recognised and used international carbon offset accreditation standard. Formerly known as the Voluntary Carbon Standard (the name was changed in February 2011) it was initiated by The Climate Group, the International Emissions Trading Association and the World Economic Forum in late 2005. The World Business Council for Sustainable Development joined the initiative as a founding partner in 2007. After two years of work, VCS 2007 was released on 19 November 2007. More information can be found at www.v-c-s.org.

What is the Gold Standard?

The Gold Standard is a premium carbon project accreditation standard for projects which have significant environmental and social benefits over and above their carbon emission reduction impact. 

The Gold Standard was created in 2003 by a small group of non-governmental organisations, including the WWF, SouthSouthNorth and Helio International. Today, the Gold Standard label receives worldwide recognition and is officially supported by over 60 environmental and development organisations. The Gold Standard is a non-profit foundation under Swiss Law and is funded by public and private donors. It is governed by representatives of NGOs, governments and the private sector. More information can be found at www.cdmgoldstandard.org.

What is Social Carbon?

The SOCIALCARBON® Standard certifies voluntary emission reduction projects for their contributions to sustainable development.  Some of Climate Friendly's VCS projects have supplementary SOCIALCARBON accreditation.  

The standard sets additional targets for ongoing improvements over time in areas such as working conditions, investment in human and technological resources, and reducing environmental impacts.  More information can be found at www.socialcarbon.org 

Carbon Credits

What is a carbon credit?

Carbon credits are certificates that represent a confirmed reduction of greenhouse gases in the atmosphere. Projects that either prevent the generation of greenhouse gases or remove greenhouse gases from the atmosphere earn these credits, which can in turn be used by other businesses and individuals to "offset" their own emissions. One carbon credit equates to a saving of one tonne of carbon dioxide, or its equivalent in emissions of other greenhouse gases

Carbon credits are typically earned by projects which use renewable energy sources – such as wind, solar, hydro or renewable biomass – instead of fossil fuels, to generate electricity and/or heat. Other common types of project include using energy-efficient technologies to reduce fuel consumption, capturing methane from household or agricultural waste and using it for energy, and preventing deforestation. The funds received from the sale of carbon credits essentially balance out the higher cost of renewable energy production and sustainable resource use, making these projects cost-effective. 

So by buying carbon credits, you are effectively supporting the development of technologies that provide long term solutions to global warming, and helping to accelerate the transition to a clean energy future.

Carbon Credits Infographic 

 

What kinds of carbon credit does Climate Friendly sell?

 

Climate Friendly's carbon credits are sourced exclusively from high quality emission reduction projects accredited under the most robust and widely recognised international standards: the Gold Standard and the Verified Carbon Standard (VCS)

These standards require that projects undergo extensive independent verification against a rigorous set of criteria, in order to guarantee that the emission reductions have been accurately measured, and that the project has wider sustainable development benefits. Climate Friendly offers credits from a range of different types of VCS and Gold Standard projects, in different locations, all of which adhere to our own rigorous sourcing principles.

Climate Friendly & Business

How do we become a Climate Friendly Business?

The top tier level of recognition for a business that has undertaken to offset the following emissions over an entire year is a Climate Friendly™ Business or Organisation. This means offsetting all of the following emissions: electricity; other direct fuel use (e.g. natural gas, LPG); company fleet and air travel. 

In addition to these emission sources, a Climate Friendly™ Business or Organisation may also have offset the following: couriers and freight; staff car reimbursements, car rental and taxis, paper used and waste disposal. See Climate Friendly Business Requirements.

Are Climate Friendly‘s carbon credits eligible under NCOS?

Yes. Climate Friendly only sells carbon credits and renewable energy certificates that are eligible under the Australian Government’s National Carbon Offset Standard (NCOS).

Why does the cost of carbon credits vary?

The cost of carbon credits depends upon a number of factors, including the accreditation standard, the type of technology used, the project location, how recently the credits were generated and the extra benefits the project provides for the local community and the environment. Pricing may also vary depending on the volume of credits purchased and the level of additional service provided.

Renewable Energy

What is GoldPower?

There are a number of ‘renewable energy’ labels around the world these days. In developed countries with international emission reduction commitments under the Kyoto Protocol, or other national commitments, renewable energy programs count towards a country meeting these targets. While this system does help develop renewable energy infrastructure, in effect it means that the voluntary purchase of renewable energy certificates by one party simply allows another party to pollute more, leading to no net reduction in greenhouse gas emissions. 

This issue, plus the fact that most ‘renewable energy’ labels are country specific and do not apply across national borders, has made it difficult for multinational organisations to implement an effective global strategy for sourcing renewable energy. In consultation with the leading environmental organisation WWF, Climate Friendly developed an exciting and ground-breaking solution. 

GoldPower, awarded the Biggest, Boldest and Most Exciting Idea at the 2009 Carbon Expo, allows companies to put in place a single, worldwide strategy for purchasing renewable energy. GoldPower adheres to the highest international standards and creates real carbon savings. WWF was involved in reviewing this exciting new product and supports GoldPower as a quality renewable energy product that reduces emissions.

What is GreenPower?

GreenPower is the Australian Government’s national renewable energy program, which was established to stimulate the development of the renewable energy sector. 

Greenpower comes from renewable electricity generation facilities in Australia that have been certified as having met the GreenPower program requirements. You can either buy Greenpower directly from your electricity provider, or from independent providers such as Climate Friendly. More information can be found at www.greenpower.gov.au 

I already buy renewable energy through my electricity supplier. Why do I need Climate Friendly?

It's great that you're already buying renewable energy for your home or business and making a contribution to the prevention of climate change. In addition to your electricity use, Climate Friendly can help you to calculate and the greenhouse gas emissions from other activities such as driving your car, flying or organising events, and offset those emissions using our high quality carbon credits.

Does the fee I pay climate friendly to offset my power replace my electricity bill?

If you are paying us to offset your electricity use using GoldPower or GreenPower, you will still keep paying your existing electricity supplier. The Climate Friendly fee is in addition to your electricity bill.

Why do I pay more for renewable energy?

At the moment renewable energy is more expensive to produce than fossil fuel-based power. The money you pay for GoldPower or GreenPower (whether paid separately to Climate Friendly or as a premium on your electricity bill) compensates renewable energy companies for this additional cost. By increasing demand for renewable energy and making it cost-competitive with fossil fuels, your purchase helps to stimulate the development of new renewable energy infrastructure and technology.

How does renewable energy help reduce greenhouse gas emissions?     

 How renewable energy fights climate change 
 

The Big Questions

If my country has a carbon tax or an emissions trading scheme, will my action still help?

Yes, it most certainly will. Voluntary action builds on and goes beyond the very modest emission reduction targets set under national carbon management programs. For example the Australian governments climate change policies aim to reduce national emissions by a mere 5%. Far more than this is needed in order to effectively combat climate change. Any additional action that you take to voluntarily reduce and/or offset your emissions will be a valuable contribution to this enormous challenge.

National emission reduction legislation is typically focused on the largest polluters, which means that most organisations are only indirectly affected, for example through higher energy costs. But even if your company does have direct obligations, voluntary action should still be an important element of your environmental management program - no company has ever been praised or rewarded simply for meeting its regulatory requirements, whereas voluntary action will set you apart from your competitors in the eyes of customers, staff and the wider community. Furthermore, as large companies work ever harder to reduce their own emissions, they are also exerting increasing pressure down through their supply chains by requiring that suppliers of goods and services meet high environmental management criteria in order to win or retain their business.

In this context, a strong emission reduction and offset policy is rapidly becoming a commercial, not just environmental, imperative.

What projects does Climate Friendly have in Australia?

Climate Friendly is pleased to be able to offer credits from a group of Improved Forest Management projects in Tasmania. These were the first Australian carbon projects to gain accreditation under the VCS and the Australian Government's National Carbon Offset Standard (NCOS). They protect Tasmania's native forests by providing an alternative income stream to landowners, enabling them to cease their traditional logging activities and manage their land for conservation purposes instead.

Looking to the future, the Australian government's recently introduced Carbon Farming Initiative creates a legislative framework for the development of new carbon reduction projects, primarily through improved agricultural and land-management practices. Climate Friendly is actively supporting the development of this new market, and we expect to be able to offer carbon credits from these Australian projects in the future.

Climate Friendly also offers GreenPower, which comes from renewable electricity generation facilities in Australia.

Note that until recently there were no carbon offset projects in Australia that met Climate Friendly's quality standards. Historically, voluntary carbon projects have been predominantly located in developing countries. Whilst a few companies have been offering carbon credits from tree-planting projects in Australia for some time, these do not meet the rigorous criteria of the major international accreditation bodies such as the VCS or the Gold Standard.

Why should I support international projects?

Voluntary carbon offset projects are typically located in developing countries that have no emission reduction commitments under the Kyoto Protocol. In countries where the government has already committed to reducing emissions by a certain fixed amount, any reductions that arise as a result of voluntary action effectively just relieve the Government of a part of its own obligation, and lead to no net reduction in emissions over and above the original target. By contrast, in countries with no fixed emission reduction commitments, the revenue from the generation and sale of carbon credits facilitates the development of carbon reduction projects which would genuinely not otherwise have been implemented. This is an essential requirement for all quality carbon offset projects, and explains why there are so few carbon offset projects in developed countries.

Over and above these supply constraints, there are plenty of strong arguments for supporting the development of clean energy and sustainable resource use projects in developing countries. These projects are helping to remove the barriers to socio-economic development created by the weak existing energy infrastructure, as well as addressing the wider issues of energy security and the costs of energy imports. They also facilitate inward technology and skills transfer and their implementation typically results in wider benefits to the local economy through job creation and infrastructure upgrades. In addition, many of our projects have been selected for their additional community and/or environmental benefits. In this way your support for international projects goes far beyond merely offsetting your own emissions, and is genuinely creating a platform for sustainable development in the places that need it most.

Finally, the lower cost base in developing countries means that you effectively get more bang for your carbon buck, i.e. it is often much cheaper to achieve a given level of emission reductions than it would be to achieve the same results in a developed country. This ability to achieve the greatest climate change benefit at the lowest cost, irrespective of where the emission reductions occur, is one of the cornerstones of the international carbon market.

Why am I paying for credits from a project that is already up and running?

This can seem confusing at times, but the key point to remember is that without the expectation of being able to create and sell carbon credits, the project from which you are buying those credits would never have been developed in the first place. So by buying credits from it, you are genuinely paying for emission reductions that would not otherwise have occurred.

The rigorous criteria and independent assessment requirements imposed by the leading carbon offset standards ensure that this is the case. For example, a renewable energy project that has already been built and is already operating successfully cannot just decide to issue carbon credits, since it will not meet the accreditation criteria. On the other hand, once a planned or very recently built project can demonstrate satisfactorily that carbon credits were an essential factor in getting it financed and implemented, it can then become eligible to earn carbon credits for a given time period (e.g. 10 years). However, those carbon credits can only be issued and sold to you once another audit has confirmed that the associated emission reductions have genuinely occurred and have been accurately quantified. This ensures that the carbon credits you buy correspond to real and irreversible emission reductions, rather than some indeterminate future savings that may never actually happen.

Whilst some investors are willing to take the long term risk of financing the construction of new projects in the hope that they will ultimately reduce emissions for many years in the future, the emergence of a functioning carbon market has allowed a much wider set of individuals and organisations to take meaningful yet immediate action towards the same end goal. Essentially, your individual purchase of carbon credits contributes to a wider revenue stream over the life of the project, which is in turn part of an even wider total market for carbon savings. And the existence of that market facilitates new investment in technology development and project implementation for the further reduction of carbon emissions in the future.

Using this site

Is my purchase tax deductible?

Offsetting the carbon emissions of your business may be considered a business expense, and could therefore be tax deductible. In some countries, there may also be tax incentives for individuals who offset their carbon emissions. In either case, you should discuss this with your tax adviser.