What is Environmental Finance?

Environmental finance is based on the application of financial instruments designed to protect the environment. These include:

• Trusts on lands of high environmental value: Ensure the conservation of critical areas for biodiversity.
• Trading of greenhouse gas emission allowances: Markets where companies can buy or sell permits to emit a specific amount of gases.
• Carbon credit management: A key approach within voluntary and regulated carbon markets to incentivize the reduction of CO2 emissions.

Carbon Markets: A Solution with Global Impact

Carbon markets are systems designed to reduce GHG emissions efficiently. Their main objectives are:

• Putting a price on carbon: Economically penalizing emissions and encouraging sustainable practices.
• Creating economic incentives: Motivating companies and individuals to reduce their carbon footprint.

In these markets, companies can acquire carbon credits to offset their emissions, adopting measures aligned with regulations like ISO 14064, which ensures the quality and transparency of calculations.

What is a Carbon Credit?

A carbon credit represents one tonne of CO2 (or equivalent) that has been avoided or removed from the atmosphere. The key principles ensuring their effectiveness are:

• Additionality: The project must generate reductions that would not occur without the investment.
• No double counting: Prevents the same reduction from being registered more than once.
• Permanence: Reductions must be long-lasting and stable.

Nature-Based Solutions (NbS) vs. Engineered Solutions (ES)

To reduce emissions, there are two complementary approaches:

• Nature-Based Solutions (NbS): Nature-based solutions that provide additional benefits such as biodiversity and water security, with moderate costs.
• Engineered Solutions (ES): Advanced technologies capable of capturing large volumes of carbon, although they require high initial investments.

Markets and Regulations for Carbon Credits

Markets are divided into two categories:

• Regulated markets: Where companies must comply with mandatory regulations to avoid penalties.
• Voluntary markets: Ideal for organizations wishing to strengthen their commitment to sustainability, improving their reputation among conscious consumers.

Standards like ISO 14064 and the European framework for credit quality ensure that investments in sustainability are reliable and effective.

At airCO2, we help you manage efficiently, comply with regulations like ISO 14064, and actively participate in carbon markets. Contact us and be part of the change!