What Is a Carbon Fund?

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Let’s face it: figuring out what to do with your carbon footprint can feel mind-boggling. Everyone’s always talking about rising carbon dioxide levels in the atmosphere, but there’s no real consensus on what the most effective carbon mitigation measures are.

A quick internet search on what to do can overwhelm you with suggested actions. Should you upgrade your home so that it runs on clean energy only? Maybe switch to an electric vehicle to stop funding the fossil fuel industry? Or quit eating meat completely to help restore the planet’s forests?

All of us at Aspiration have been there before and we know how you feel. Our neobank was built after years of working out what the best way to offset our carbon emissions could be. 

These carbon offset measures require money, time, discipline, or all three. If you’re running a business and/or providing for your family, how can you find enough of these resources to reduce your carbon footprint? 

We figured that a carbon fund could be the answer. Individuals and businesses buy credits from the carbon fund, which then uses the money to fund high impact carbon reduction initiatives on behalf of the investors, such as reforestation projects and solar farms.

Sounds interesting? We think so. Let’s take a look at how carbon funds can effectively help you or your business fight climate change. 

What is a carbon fund?

A carbon fund offers carbon credits for individuals and businesses who want to cancel out their carbon emissions. People simply buy these credits, and the carbon fund pays an organization or a company to cut or remove a certain amount of greenhouse gases from the atmosphere.

It’s one of the latest, and most popular, tools that are helping people reach their “net-zero emissions” goals. Companies like Amazon and even celebrities like Elton John have invested in carbon credits.  

Investors can purchase carbon credits according to the number of personal carbon emissions they’d like to offset. People produce carbon dioxide from everyday activities such as buying gas for their cars, traveling on airplanes, or using electricity that’s powered by a coal power plant. Personal carbon emissions can be measured using calculators, like these from Cool Effect.

The carbon credits are then used by the carbon fund to support offset projects around the world. Greenhouse gases are removed or cut through projects ranging from methane gas capture and destruction to reforestation initiatives. Different offset projects have different prices, depending on how much they cost to run. 

Why do we need carbon funds?

Carbon funds are essential in the fight against climate change because they enable effective collective action against climate change. 

Climate funds allow people to reduce their greenhouse gas emissions without needing to wait for governments to act first. Individuals and businesses can pool their money together into a carbon fund, which then allocates it to different offset projects. 

Carbon funds are highly effective for the following reasons:

Carbon funds create an impact at the global and local levels

Carbon offset projects are available locally or internationally. 

Small carbon funds, such as the San Francisco Carbon Fund, invest only in local offset projects located close to where the greenhouse gases are emitted. Community members who invest in these funds can track the impact of their offsets, and benefit from the sense of camaraderie generated by working against climate change together. 

Other larger funds invest in bigger offset projects around the world. Aspiration’s Planet Protection Fund, for example, supports reforestation projects in East Africa and Central America that have been certified to prevent carbon dioxide emissions from reaching the atmosphere. 

Carbon funds speed up greenhouse gas reductions

Rather than wait years to construct zero-emissions infrastructure, companies can now buy carbon credits to offset their carbon emissions in a manner of weeks or months. 

These carbon credits can be used to support reforestation efforts, like planting acres of mangrove forests, that capture or remove the same amount of carbon dioxide as the new infrastructure; with the added bonus of increasing climate resiliency for the communities living near these forests.  

Carbon funds offer flexible offset options

Different carbon funds offer different offset options, depending on what you need to offset. You can offset your air travel, home or office energy usage, or gas purchases for your fossil fuel vehicle. 

For example, if you drive a fossil fuel car, you can buy vehicle carbon offsets that will help you cancel out your estimated carbon footprint by the month or year. Aspiration’s automatic carbon-neutral driving program does just that by buying offsets for every gallon of gas you purchase. 

What to look for when choosing a carbon fund?

When choosing a carbon fund, it’s important to always look for quality assurances that verify the effectiveness of the fund’s offset programs. 

Certifications from the American Carbon Registry, Climate Action Reserve, Verified Carbon Standard, and The Gold Standard show that the carbon fund has been audited by independent third-party organizations. They ensure that a carbon fund has passed a rigorous verification process and is subject to continuous performance monitoring and evaluation.

Other than the certifications, find out if the carbon fund supports offset-generating projects that are “additional”. This means that your financial support created the offsets, and you’re not just piggy-backing on an existing or in-development carbon offset project that would have gone ahead without your carbon credits anyway. 

And, wherever possible, scrutinize the funding allocations of the carbon fund. See how much money goes to the offset projects you want to support. If the projects have collateral benefits, like improving air quality or providing jobs for local communities, even better.

Carbon offsets are a lucrative industry, so it’s important to know how well your carbon credits are being managed. 

How do carbon funds benefit individuals and businesses?

Carbon funds help individuals and businesses build sustainability into their daily lives. Buying carbon offsets helps us slow down climate change and prevent the catastrophic damage that puts our families and businesses at risk.

Aside from the environmental benefits of carbon funds, carbon offsets produce multiple social and economic benefits.

For businesses, investing in carbon funds can help improve their sustainability score. This is especially important for businesses today that are operating in a market where customers value social responsibility. 

Businesses can offset their travel mileage, energy usage, and manufacturing output. A business that buys carbon offsets strengthens its brand and signals to customers that it’s committed to reducing its environmental impact. 

For individuals, carbon offsets help us reduce our carbon emissions from activities like air travel, which does not yet have a climate-friendly alternative. Research has found that a single flight produces the same amount of carbon as driving 2,000 miles. 

By purchasing carbon offsets to counter the emissions from your flight, you help reduce the impact of greenhouse gases on the planet. And, if all of us bought carbon offsets for our flights, we could collectively move our communities toward carbon neutrality. 

What are the 3 carbon fund investments with the most impact? 

Carbon funds create impact through investments in carbon-reducing projects. Reforestation projects, clean energy electricity systems, and land fertility initiatives are 3 carbon fund investments with the most social and environmental impact. 

Reforestation

Tree planting has long been a favorite of carbon funds. Trees absorb carbon dioxide from both the air and the soil as they grow, storing it in their biomass. They’re also quick to grow and easy to keep track of, making them one of the most effective carbon offsets to measure.

And, since trees are disappearing at alarming rates due to logging, agriculture, and mining, any effort to grow them is a plus for the climate. That said, the only problem with reforestation is that trees are vulnerable to wildfires and storms. If they burn or decompose, the carbon stored in them is likely to get released back into the atmosphere. 

Clean energy electricity systems

Investments in clean energy systems reduce our carbon footprint dramatically. Solar and wind farms produce no air or water pollution while providing electricity to millions of homes. 

They’re our best alternative to fossil fuels. Carbon funds that invest in clean energy electricity systems help entire communities transition away from coal-powered electricity. The end result is a collection of communities, and eventually a collection of states, that become carbon neutral. 

Land fertility

Climate change will make arable land less productive in the near future. That’s a problem for us, humans, whose demand on the land will increase as our population numbers swell. 

Carbon offset projects that focus on restoring land fertility will greatly impact our food security. They’ll not only remove carbon dioxide from the atmosphere, but they’ll also store it in the soil so we can grow healthy, luscious fruits and vegetables with it.  

Researchers have found that climate-friendly farming techniques can achieve up to 6% of the emissions reduction targets set by the Paris Agreement. Carbon sequestration of the world’s farmland soils has the potential to offset all the carbon emitted by the global transport industry each year if the will to take action exists. 

Aspiration is a green neobank that offers carbon offsets

If you’re looking to purchase carbon offsets, Aspiration is the neobank for you. We understand that individual carbon offsets can collectively reduce global greenhouse gas emissions. That’s why we’ve linked our products and services to automated carbon offset systems so that every transaction you make has a low carbon footprint.

Our unique Planet Protection™ program automatically cancels the carbon dioxide produced from each gallon of gas you purchase.  It’s simple and easy to use – all you need to do is pay for your gas with an Aspiration Plus debit card, and we’ll buy carbon offsets on your behalf right away. You can go further by joining our Plant Your Change program, which rounds up every transaction you make to the nearest whole dollar and plants trees with your spare change.

Join our neobank today and make carbon offsets a part of your daily routine.

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