The concept of Carbon Offsetting is well established internationally, and has followed from the development of international emissions trading systems and the mechanisms established under the Kyoto Protocol. A key principle is that of geographic neutrality, reflecting the global nature of climate change: emissions of CO2e (CO2 equivalent) by a yacht in the Mediterranean or Caribbean may be balanced by equivalent savings in CO2e emissions in India, for example, and the overall impact on the world’s atmosphere is considered to be zero.
So to achieve a Carbon Offset for a yacht, as for the use of a car or an aircraft, or even to balance the energy used by a household or business, the starting point is to identify and quantify the emissions that must be balanced. This determines the quantity of emissions savings that must be assigned in order to achieve the correct balance.
Purchasing savings in emissions has become possible through the development of the international “carbon markets”, which reportedly handled trades to the value of around $60 billion in 2007. These commodity markets involve trading of financial instruments known as carbon credits, or emission allowances, each of which corresponds to the equivalent of one tonne of carbon dioxide. So if for example a yacht has emitted 10 tonnes of CO2e in a voyage, this can be Offset through the purchase of 10 carbon credits.
So where do these carbon credits come from? The main source for the purposes of Carbon Offsetting is the awarding of credits to individual emissions reduction projects by independent approval bodies. The project owners then sell these credits through the carbon markets, and the money they receive serves to subsidise the projects themselves, which would otherwise not be financially viable. The underlying projects range from forestry, renewable energy, energy efficiency and actions that reduce the emissions of more potent greenhouse gases such as methane and certain refrigerant gases.
Individual carbon credits may be traded several times, in the same way as other commodities, before ultimately being purchased for the purpose of arranging a Carbon Offset. Once assigned for an Offset, however, it is essential that each carbon credit be “retired” or cancelled, to ensure that it is removed from circulation and the underlying emission saving cannot be “double-counted”.
In summary, Carbon Offsetting the fuel used by a yacht begins by quantifying the emissions from the vessel engines, generators, tenders, water-toys and possibly the helicopter. These emissions can then be balanced by emissions savings delivered via the correct number of carbon credits, which must be properly cancelled to eliminate the risk of double-counting.