Carbonomics® is a leader in helping businesses realize the potential of carbon credits in the US and international emission-trading markets. Carbonomics identifies greenhouse-gas (GHG) reduction opportunities, determines how projects can generate carbon credits, and guides companies through the entire process - from project inception to annual verification.
Carbonomics® also helps local governments set up community choice programs that accelerate renewable energy development and reduce GHGs.
The International Market
The Kyoto Protocol calls for major industrial countries to reduce their greenhouse gas (GHG) emissions by varying amounts below 1990 emissions levels by 2012. As part of Kyoto, countries are allowed to buy emission credits - generated by GHG-reducing projects - in other countries. The treaty has therefore created a multi-billion dollar emissions trading market. Perhaps the most developed market is in the European Union, which has set legally binding limits on GHG emissions for the power sector and large industries. Large European emitters of CO2 can meet their targets three ways: 1) reduce their GHG output; 2) buy allowances from other EU firms that are below their targets (allowance trading) or 3) buy emissions credits from the international market, particularly through the Clean Development Mechanism (CDM).
Many EU and Japanese emitters, looking for ways to comply with their targets, have turned to the CDM. The result has been the creation of a multibillion dollar market for low GHG projects and technologies, and as the tables below indicate, the rate of growth since 2002 has been exponential until the recent recession. For many projects, millions of dollars of additional revenues every year can be generated, helping to finance many investments that would not otherwise get off the ground.
CDM projects are accredited by a UN agency, the UN Framework Convention on Climate Change (UNFCCC). For projects to be accredited, developers need to design a methodology for 1) determining the baseline against which emissions levels will be compared; and 2) accurately monitoring the emission reductions. Once the methodology is approved (and companies can also use already approved methodologies if one exists), then the project is validated, entered into the CDM registry, and then verified by an independent firm - all to make sure the emission reduction calculations are totally accurate.
Sound complicated? Trust us, it is. To get a UNFCCC-approved methodology can take many months, and most projects never actually generate credits, known as Certified Emission Reductions or CERs. However, if successful and if credits are issued, one can have a long-term revenue stream – made all the more stable by the fact that the difficulty of the CDM process keeps the CER supply in check. Given our track record, Carbonomics has the expertise necessary to get projects through the CDM system.