Carbon credits

While the rural communities served by Fairtrade have contributed very little to climate change, they are feeling the brunt of its impact. Wildly fluctuating temperature and rainfall, unpredictable seasons and extreme weather events are now part of everyday life for many. Rural communities have been asking for more support to fight the effects of climate change.

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Mulane using her energy-efficient cookstove in a pilot project for Fairtrade carbon credits in Ethiopia. Switching to such stoves can reduce CO² emissions by 70 percent compared to cooking over an open fire. Smoke is reduced by 90 percent, meaning less respiratory diseases for women who do the majority of the cooking.
Image © Roger van Zaal

Fairtrade International teamed up with Gold Standard and producer groups to develop the Fairtrade Climate Standard. Through projects such as reforestation or energy-efficient cookstoves, vulnerable communities can reduce emissions and become eligible for carbon credits while also strengthening themselves against the effects of climate change.

The scale of the problem

Twelve million hectares of productive land become barren every year due to desertification and drought alone – affecting more than one billion people.

Coffee, the most sold Fairtrade product, is particularly sensitive to changes in temperature. With a two degree rise, coffee bushes yield far less coffee; with a three degree rise coffee bushes would struggle to even survive.

Choosing Fairtrade carbon credits makes a difference

Put simply, carbon credits are tonnes of carbon dioxide that either have been prevented from entering, or have been removed from, the atmosphere. Companies can purchase credits to take responsibility for the emissions they produce.

If a company purchases carbon credits on Fairtrade terms, they provide smallholders and rural communities with access to the climate finance generated, and over time a greater role in the design and management of the project intended to offset effects of climate change.

For producers, the benefits of Fairtrade carbon credits include:

  • Stronger, more resilient communities, through implementing the project itself, such as cleaner air and less time spent collecting firewood thanks to energy-efficient cookstoves, or reduced soil erosion and flooding from tree planting.

  • A minimum price for the credits generated, meaning producers can be sure the average costs of their climate resilience projects will be covered.

  • The Fairtrade Premium, to be invested in projects to adapt to climate change, such as improving soil health or using drought-resistant crop varieties. This is vital to ensure producers and their communities can deal with the effects of the changing climate.

  • Increased knowledge and capacity on climate change. The Fairtrade Climate Standard encourages producers to participate in developing the carbon projects and increase their involvement and expertise over time, creating real ownership for the communities involved.

Fairtrade and Gold Standard

Gold Standard is Fairtrade’s partner in developing and implementing the Fairtrade Climate Standard and Fairtrade Carbon Credits. The Fairtrade Climate Standard is an add-on standard to Gold Standard certification of carbon emissions reductions and sustainable development benefits.

Gold Standard is an internationally recognized organization with expertise in climate and development projects. Gold Standard supports energy, land use based and waste management projects that focus on co-benefits such as environmental benefits and local stakeholder involvement. Read more at www.goldstandard.org

The Fairtrade Climate Standard and eligible carbon credit projects

The Fairtrade Climate Standard is open to all small-scale organized groups under Fairtrade’s geographic scope. An organization developing carbon projects does not need to already be Fairtrade certified to apply.

Projects eligible for generating Fairtrade Carbon Credits fall into three categories:

  • Renewable energy projects such as solar thermal heating/electricity, solar photovoltaic, wind energy, hydropower, biogas heating/electricity

  • Energy efficiency projects such as improved cookstoves, water filtration/purification systems, energy saving lamps/fluorescent lamps

  • Forestry projects such as planting trees or replanting trees in a previously forested area

On average each project is expected to generate around 25,000 Fairtrade carbon credits per year. The length of the projects depends on the type of project – energy projects may run for 7-10 years, forestry projects may run for 30-40 years.

Buying Fairtrade carbon credits

Fairtrade Carbon Credits are initially being rolled out in Germany, the Netherlands and Belgium. Any retailer, business, organization, civil society group or individual can purchase Fairtrade Carbon Credits, to take positive climate action and play their part in climate justice.

Businesses who source over 1,000 carbon credits per year (Fairtrade or a combination of certifications) will be required to assess their carbon footprint, put in place a carbon reduction plan, and then continually increase the amount of the carbon credits they buy as Fairtrade year on year to comply with the Standard.

Businesses and organizations will be able to communicate their commitment to purchase Fairtrade Carbon Credits on corporate communications and focused consumer communication using the Fairtrade Carbon Credits lock-up.

For more information please contact your local Fairtrade organization.