What are Carbon Offset and Carbon Credits?

About Carbon Offsetting

Carbon Offsetting is a voluntary initiative to reduce the amount of greenhouse gas (GHG) emissions to confront ever more deteriorating climate change. To encourage individuals/businesses to get involved in reduction/sinking projects, carbon offsetting uses market mechanisms.

Carbon offsetting is a way of compensating the unavoidable amount of GHG emissions by purchasing "credits" equivalent to the total or part of the GHG emissions, or investing directly to a reduction/sink project.

Carbon Offsetting is significant because it・・・

encourages GHG emission reduction activities by individuals/businesses.
makes individuals/businesses realize that GHG emissions are cost, and makes foundation of a low carbon society.
expands investment for reduction/sink projects, especially the ones simultaneously realize climate change benefits and sustainable development benefits (co-benefit project).

About Carbon Credits

Carbon credits are CO2 (or other GHGs) emission reduction/sinking realized by others. Those credits are used for "compensation" in carbon offsetting activities.

Unique points of carbon credits in Japan

Voluntary nature

As carbon offsetting is a voluntary measure in Japan, credits used in it are also voluntarily created and traded. Despite its voluntary nature, the quality of credits are certified under national and international schemes.

The mixture of national and international ones
The credits used in carbon offsetting in Japan consist of national and international ones. In one hand, national ones, J-Credit, J-VER and Domestic credit, allow carbon offset practitioners to invest in reduction/sink projects in Japan. This leads to the protection of Japan's forests, facilitation of techniques. On the other hand, international ones, mainly CER under CDM scheme, enables practitioners to invest in projects outside Japan.

Sorts of carbon credits

J-Credit Scheme is Japan's carbon credit certification scheme which has been operated since Apr, 2013. Besides J-Credit, J-VER and Domestic Credit, the credits created under old schemes, are also subject to market trade.