How Carbon Offsetting Works
As you may know, JustCarbon is a platform revolutionising the way in which carbon offsetting projects are funded by creating a friction-free marketplace for trading in high-quality carbon removal assets.
Developers of high-quality carbon removal projects can list their assets (tonnes of carbon removed) on the JustCarbon platform. These assets are represented by our JustCarbon Removal token ─ the JCR ─ which holders can ‘burn’ to offset their unavoidable carbon emissions.
But how does this work in practice? How can you offset carbon emissions using either carbon credits or JCRs?
Essentially, by buying either a carbon credit or JCR, a business, government or individual is providing funding to a carbon reduction or removal project. Read more about the difference between carbon reduction and removal.
Carbon credits and JCRs represent one tonne of carbon reduced or removed. Buyers can then choose to ‘retire’ or ‘burn’ their carbon credits or JCRs, respectively, in order to offset their carbon.
So, if a business could not help but emit seven tonnes of carbon, for example, they could choose to retire/burn seven carbon credits/JCRs in order to become “carbon neutral” or more than seven to become “carbon negative”.
That’s it, in a nutshell. Carbon offsetting means paying someone to reduce or remove as much or more carbon as you emit. Carbon credits and JCRs are simply a medium of exchange to make it easier.
If you want a deeper understanding of the process involved, read on…

The Carbon Offsetting Process

It all starts with a Project Developer creating an activity that reduces or removes atmospheric CO2. To ensure that the project makes a real impact and doesn’t simply create CO2 somewhere else, their methodology and results are approved by an independent ‘Verifier’.
Projects that meet a strict set of standards are awarded a Carbon Credit for every tonne of CO2 they’ve reduced or removed. Up to 60% of the credits awarded each year can be sold to help fund the project, typically through a retailer or broker.
These middlemen charge as much as 30% for the privilege of selling carbon credits and the process is very manual and centralised. This is the part JustCarbon is revolutionising ─ more on that in a bit.
Brokers also tend to market the credits based on the weight of CO2 and any of the co-benefits, such as enhancing biodiversity. While this sounds useful, it actually confuses the marketplace and leads to wildly fluctuating prices across the world ─ another problem JustCarbon solves.
Once a carbon credit has been traded, it is added to a register showing the origins and current ownership of each credit. This sounds fancy but it’s basically just a big database.
Developers then reinvest profits from selling credits into their carbon reduction/removal projects, minus all the broker fees.
When the owner of a carbon credit wants to offset their carbon, they can ‘retire’ them ─ permanently removing their credits from the register.

How JustCarbon is revolutionising the carbon offsetting process

JustCarbon is essentially replicating the same process but much quicker, cheaper and more efficiently by cutting out the middlemen. We do this by turning authenticated CO2 removal (currently represented by carbon credits) into an asset or commodity represented by our token, the JCR.
Every verified tonne of carbon listed creates, or ‘mints’, a JCR on our secure blockchain, creating a fully-traceable record of creation and ownership.
If the offset already exists as a carbon credit, it is retired from the registry and removed from that market. Now, the only place that offset exists is the JustCarbon blockchain as a JCR.
JCRs are ‘asset-backed tokens’ because JCR holders will physically own the underlying asset ─ the removed tonne of carbon.

Focusing on Carbon Removal

JustCarbon is only focusing on Carbon Removal based offsets, rather than carbon reduction. Here’s why…
If your boat is sinking, you need to both plug the holes and bail out the water. But even when all the holes are plugged in, you still need to get rid of the water. If your boat takes on too much water, you reach a tipping point and sink. But if you can bail out the water quick enough, you could stay afloat indefinitely.
Currently, our atmosphere is filling up with carbon. Plugging the holes by reducing carbon emissions won’t completely solve the problem. Removing carbon, on the other hand, could resolve the problem and stop us from sinking.
Obviously, both carbon reduction and removal are important. However, there are lots of well-established projects focusing on carbon reduction yet carbon removal efforts are currently underfunded.
So for us, removing the CO2 that persists in the atmosphere is our biggest priority because a) too few people are focussing on it and b) the potential for removal is much greater than the potential for reductions ─ hopefully returning the boat to full operation.