Methods to Gain

Carbon credits can be grouped into two large categories or baskets: avoidance projects (which avoid emitting GHGs completely therefore reducing the volume of GHGs emitted into the atmosphere) and removal (which remove GHGs directly from the atmosphere).

The avoidance basket includes renewable energy projects but also forestry and farming emissions avoidance projects. The latter, which are also known as REDD+, prevent deforestation or wetland destruction, or use soil management practices in farming that limit GHG emissions – such as projects aiming to avoid emissions from dairy cows and beef cattle through different diets.

Cookstove projects, fuel efficiency or the development of energy-efficient buildings also fall under the avoidance basket and so do projects capturing and destroying industrial pollutants.

The removal category includes projects capturing carbon from the atmosphere and storing it. They can be nature-based, using trees or soil for example to remove and capture carbon. Examples include reforestation and afforestation projects, and wetland management (forestry and farming). They can also be tech-based and include technologies like direct air capture or carbon capture and storage.

Removal credits tend to trade at a premium to avoidance credits, not just because of the higher level of investment required by the underlying project but because of the high demand for this type of credits. They are also believed to be a more powerful tool in the fight against climate change.*132