Frequently Asked Questions

Frequently Asked Questions

On this page you will find answers to the most frequently asked questions about CO₂ footprinting, CO reduction, COcredits and the work of FairClimateFund. Click on one of the questions to immediately see the answer.

Fund Fair Climate action

1

Why don’t you talk about CO₂ compensation but about ‘investing in fair climate action’?
We find transparency and honesty in communication about your climate efforts important at FairClimateFund. The term CO₂ compensation suggests that you can offset the CO₂ emissions that you have not yet reduced 1-to-1 with CO₂ reductions elsewhere. However, this leads to a number of undesirable developments. It leads to the use of hard claims, such as CO₂ neutral and climate neutral, which are often incorrect. This may be due to the robustness of your CO₂ footprint analysis or the climate project you are compensating with. Consider, for example, trees that still need to be planted, are not yet fully grown or that disappear due to a natural disaster. Companies that use these claims and still have a lot of residual emissions also often invest in cheap and substandard CO₂ reduction projects.
To prevent these undesirable developments, we prefer to encourage companies to invest in ambitious own CO₂ reduction measures and investments in high-quality CO₂ reduction projects that fall outside the companies’ value chains.

2

Howdoesfunding fair climate action work?

By investing in fair climate action, you ensure that less CO2 is emitted elsewhere or CO2 is removed from the air. Your investment is often determined based on your remaining CO2 emissions. You set an ambitious internal price on your company’s remaining greenhouse gas emissions and thus create a so-called climate financing budget. You use this budget to further reduce your CO2 emissions and invest in high-quality and fair CO2 reduction projects that contribute to improved living conditions for people who are most vulnerable to the consequences of climate change. This allows you to take responsibility for the consequences of your CO2 emissions and work towards fair climate action worldwide.

3

What is a CO2 credit / carbon credit?

With your investment you buy so-called CO2 credits/carbon credits or contribution credits. A CO₂ credit is a tradable unit equivalent to the reduction of one tonne of carbon dioxide equivalent (tCO₂e) from the atmosphere – approximately the monthly energy consumption of an average Dutch household. With a purchased carbon credit you can claim the CO2 reduction yourself and with a purchased contribution credit you contribute to the NDC (Nationally Determined Contribution) or the climate action plan of the country where the project is located.

4

Why should I invest in CO2 reduction?

With your investment you buy so-called CO2 credits/carbon credits or contribution credits. A CO₂ credit is a tradable unit equivalent to the reduction of one tonne of carbon dioxide equivalent (tCO₂e) from the atmosphere – approximately the monthly energy consumption of an average Dutch household. With a purchased carbon credit you can claim the CO2 reduction yourself and with a purchased contribution credit you contribute to the NDC (Nationally Determined Contribution) or the climate action plan of the country where the project is located.

5

What about other greenhouse gases?

In the calculations of the number of tons of CO₂ we always use CO₂e. CO₂e is an abbreviation for “carbon dioxide equivalents”. It is a way to compare the emissions of various greenhouse gases based on their ‘global warming potential’ or GWP. CO₂e compares over a period of 100 years how much CO₂ would be needed to make the same contribution to global warming as the greenhouse gas in question, and therefore indicates the contribution to global warming for the greenhouse gas in question. For example, methane is a more powerful greenhouse gas (up to 25 times more) compared to CO₂. By calculating CO₂e values, FairClimateFund also takes into account the emissions of other greenhouse gases.

6

What is CO2-neutral and climate neutral ?

Climate neutral and CO₂ neutral are terms that are often used interchangeably, but what is the difference? Climate neutral indicates that a process or product does not release greenhouse gases or remove them from the air. This means there is no negative effect on climate change. The term CO2 neutral is usually used to indicate that no CO2 is emitted during a process or that CO2 emissions are compensated. This says nothing about other greenhouse gases and/or the removal of CO2 from the air. FairClimateFund, like many experts, prefers not to use these terms, because many more processes and substances influence our climate and the climate is not controllable.

Buying carbon credits

7

How do I buy carbon credits?

After you have calculated how much CO₂ you emit using a CO2 calculator, you can purchase CO₂ credits or contribution credits. Private individuals and small and medium-sized businesses can purchase credits via the FairClimateFund website. Companies with a larger carbon footprint and/or events that want help calculating their carbon footprint can contact us. After paying the credits you will receive a certificate.

8

Why do the prices of carbon credits vary so much?

Firstly, there are many different types of projects that generate CO₂ credits, such as projects that focus on cleaner cooking, wind energy or reforestation. In addition, matters such as the location, size and quality of the project play a major role. More information about this can be found in this article by Goldstandard about prices of CO2 credits.

Finally, prices depend on the pricing model used. In this way, prices can be based on market forces, i.e. primarily driven by supply and demand, regardless of the implications for the project in terms of long-term viability. Most prices of CO₂ credits are based on this. A more sustainable model is based on the cost of the project. This model calculates a minimum price that ensures that the costs of the project are covered, which benefits the sustainability of the project. FairClimateFund’s Fairtrade certified projects are based on this. More information about the different pricing models can be found in this article from Goldstandard.

9

Which emission factors do you use for the CO 2 calculator on your website?

To prevent discussion and confusion about CO₂ emission factors, SKAO, Stimular, Connekt, Milieu Centraal and the central government have drawn up a uniform list together with various experts. We use these uniform emission factors for the majority of the calculations of our CO₂ calculator, see www.co2emissionsfactors.nl. The calculation of the CO-footprint of air travel, however, is more complex. We use an API from RDC for this. They specialize in flight data and calculate CO2 emissions from flights taking into account different travel classes and distances, but they also look at matters such as radiation factor, take-off, landing, possible delays and non-direct routes due to weather conditions, for example. However, the calculation of the carbon footprint of air travel is more complex. The aforementioned list of emission factors is, for example, unclear about the exact difference between flight classes, the radiation factor used and the validity of these values. The Department for Business, Energy & Industrial Strategy (BEIS) of the UK government has conducted extensive research into emission factors for air travel and reported here on it. We have chosen to use this data because they are well supported by BEIS in extensive reports and take into account several factors, such as different seating classes, distances, radiation factor, take-off, landing, possibly delay and non-direct routes due to weather conditions.

Frequently asked questions about FairClimateFund

10

Who is FairClimateFund?

FairClimateFund is a non-profit private company (BV) or a social enterprise. We were founded in 2009 by the ICCO Foundation, an international development organization in Utrecht. As of 2021, ICCO has merged with Cordaid. The organizations will continue under the name: Cordaid. FairClimateFund strives for a fair climate: a world in which those who contribute most to climate change invest in CO₂ projects-reduction. These projects with a high social impact, which meet the requirements of the Gold Standard and/or the Fairtrade Climate Standard, benefit people who are most vulnerable to the consequences of climate change. Our goal is to provide cleaner cooking solutions for half a million people and plant half a million trees before 2025 – together with our partners – thereby reducing one million tons of CO. FairClimateFund aims for a fair climate: a world in which those who contribute most to climate change invest in CO₂ reduction projects. These carbon reduction projects with high social impact, that meet the Gold Standard and/or Fairtrade Climate Standard, benefit people who are most vulnerable to the effects of climate change. Our goal is to work together with our partners to provide cleaner cooking solutions for half a million people, and to plant half a million trees in order to reduce a million tonnes of CO₂ before 2025.

11

What does FairClimateFund do?

Together with our partners we finance and implement climate projects. We focus on introducing cleaner cooking methods and planting trees. These climate projects lead to fewer CO₂ emissions, protection of trees and better living conditions for people in developing countries. Our projects are Gold Standard and/or Fairtrade certified. We sell CO₂ credits or contribution credits at a fair price to private individuals and companies in Western countries that want to invest in a better and fairer climate. The income from the credits covers the costs of the project. Local households pay for their cooking appliances with the credits they produce and they receive a Fairtrade premium that is invested in climate adaptation activities. Our projects are Gold Standard and/or Fairtrade certified. We sell the carbon credits at a fair price to private individuals and companies in Western countries that want to offset the CO₂ emissions that they cannot (yet) reduce. Revenues from sale of carbon credits cover the costs of the climate projects. Local households pay off their cookstoves with the carbon credits they produce and they also receive a Fairtrade premium which is invested in climate adaptation activities.

Fairtrade carbon credits and additionality

12

What are Fairtrade Carbon Credits?

CO₂ credits or contribution credits from Gold Standard projects that are also certified according to the Fairtrade Climate Standard. The Fairtrade Climate Standard was developed by Fairtrade International in collaboration with Gold Standard. Gold Standard mainly assesses the calculation of the CO2 reduction in a project and the Fairtrade Climate Standard looks more at the social aspects of a project. In these types of projects, for example, local communities play an active role and are the owners of the project and the credits. A minimum price ensures that the costs of the project are covered and producers receive a Fairtrade premium for every credit sold. They invest this proceeds in adjustments that make them more resistant to climate change. Buyers of Fairtrade credits must also be able to demonstrate that they are taking measures to reduce CO themselves.

13

What is the Fairtrade minimum price for CO2 credits?

CO₂ reduction projects, in addition to the income from the sale of CO₂ credits or contribution credits, usually depend on other sources of income (e.g. donations). The credits are then sold for a price that is not sufficient to cover the actual costs of the project. Fairtrade International has set a minimum price per purchased credit, depending on the type of project. These prices have been developed using a model that takes into account the actual costs of producing a credit, similar to the way Fairtrade minimum prices are calculated for all other commodities. The minimum price is now set at €13 (US$14.10) for tree planting projects, €8.20 (US$8.90) for energy efficiency projects and €8.10 (US$8.90) for renewable energy projects energy.

14

What are the benefits of Fairtrade Carbon credits for the local communities?

The Fairtrade Climate Standard, which our projects meet, offers local community organizations several advantages: The people are closely involved in the project organization and own the carbon credits they produce. They receive a minimum price for the credits with which all costs of the project are covered. In addition, they receive a Fairtrade premium. They invest this income in climate adaptation activities. For example, training courses are provided in our projects to increase awareness about climate change. But vegetable gardens and seed banks are also being created to improve the diet and shade trees are being planted to protect the crops.

15

How reliable are the projects of FairClimateFund?

Our projects generate Fairtrade and/or Gold Standard Carbon Credits. Gold Standard guarantees the additionality of the project and the environmental and social benefits. The Fairtrade certification guarantees that a fair price is paid for the carbon credits which ensures that the costs of the project are covered. This benefits the sustainability of the project. In addition, households receive a Fairtrade premium that is invested in climate adaptation activities to help strengthen the most vulnerable farming communities.

Projects of FairClimateFund

16

What does Gold Standard mean?

Gold Standard is a quality mark for CO₂ credits. It is currently the strictest standard for CO₂ credits. The CO₂ reduction of the climate projects is checked and it is checked whether this reduction would not have occurred without the project (additionality). It is also examined whether local communities are sufficiently involved in the project, there are no negative environmental effects and whether local households benefit socio-economically.

17

Do you use laboratory tests for the cookstove projects?

With cookstove projects it is of course important that the cookstoves are used as much as possible by the local households. To promote this, the design of the cookstoves has been tailored as much as possible to the needs of the end users. In our projects, end users are also given two cookstoves instead of one, to discourage the use of open fire as much as possible. The use and efficiency are then tested in different ways, based on the most conservative values.

For example, a Water Boiling Test (WBT) was used at the start of the project “Better cookstoves for women” in India. The Water Boiling Test (WBT) took place in a laboratory and was used to measure how efficiently the stove uses fuel (eg wood) to heat water in a cooking pot and how much emissions were produced during cooking. This made an estimate of the expected efficiency of the cookstoves. In addition, a maximum lifespan of the cookstoves of 5 years has been established with an annual decreasing efficiency. The Water Boiling Test is repeated every monitoring period. The tests are then taken in the field using cookstoves of a representative age.
Finally, all users are visited monthly by so-called Village Workers who monitor the use of the cookstoves. Households using a traditional cookstove are registered and deducted from the total savings. This intensive monitoring and guidance by Village Workers ensures optimal use of the cookstoves.
The “Cookstoves for coffee farmers” project in Ethiopia works with so-called Kitchen Performance Tests (KPT). The cooking behavior of a representative group of households is monitored in the field for a week, so that the wood consumption can be measured.

All the tests mentioned are carried out according to the strict requirements of Gold Standard and no test by definition gives better results.

18

What are the Sustainable Development Goals?

In 2015, the Sustainable Development Goals (SDG’s) were adopted by the United Nations as a new global sustainable development agenda. These must put an end to poverty, inequality and climate change in 2030. Our projects contribute to a number of these SDGs. The webpage of our projects states which sustainable development goals the projects contribute to.

19

How can I see the difference I make?

Anyone who purchases CO₂ credits or contribution credits through the FairClimateFund will receive a certificate. This indicates which project, according to which standard and where the credits were produced, but also what the impact of the investment is. You can find more about these projects on our website. You can read information and watch photos and videos about the lives of local households and the benefits the project brings to them.

20

Is FairClimateFund interested in new projects or partners?

FairClimateFund is always interested in new projects and partners. We only support projects where reliable carbon credits are produced, preferably with Gold Standard and Fairtrade certification. There must be sufficient local capacity and input to run the project properly and to give customers insight into the local impact of the project. Please contact us for more information.