Frequently Asked Questions

What does PACE mean by "credible carbon" investment? I've heard of other companies that ask for carbon offset contributions. Why does PACE claim to be more "credible" than them?Isn't carbon trading distracting people from the real challenge of reducing their emissions?Will my contribution make any real difference to climate change?What sort of organisation is PACE - does it make any profits?So what are the objectives of PACE?How much of my contribution goes to making a credible carbon improvement in Africa?I want to know how my contribution is invested - can I decide which project to support?What's the Kyoto Protocol - doesn't this have a mechanism to help carbon emission reductions in Africa?Is my contribution to PACE just another way of helping rich country Governments to meet their Kyoto Protocol targets?Does PACE use the Emissions Trading Scheme of the European Union?How do we know that our offset contributions are really making a difference in Africa?What's the difference between a "voluntary carbon offset" and a "CO2 Offset"?How does PACE calculate the CO2 emissions?Why do the carbon offsets from other organisations have different prices from PACE?How do you choose which projects to fund?

Can market trades really address climate change?

Of course not. The solutions to climate change will necessarily be political, social and maybe economic. But markets provide an instrument on which to act once these political and social chnages have happened. It is importnt that this instrument is as effective as possible. It is of course not the only instrument available for the reduction of greenhouse gases and should be used in combination with taxation, regulation and increasing awareness.

What does PACE mean by "Credible Carbon" investment?

All PACE projects align with the principles of either the UNFCCC's CDM, gold standard processes for carbon trading, or with UK standards for voluntary projects. All projects result in a quantifiable reduction in greenhouse gas emissions and a reduction in poverty. Investors in Credible Carbon projects are provided with real-time information on how the money has been spent and on project progress.

I've heard of other companies that ask for carbon offset contributions. Why does PACE claim to be more "credible" than them?

PACE is an African company, managed for the benefit of Africa. All projects developed and supported by PACE aim to be locally relevant. The benefits of investments in PACE projects are not haemorrhaged to industrialised countries. This is important in terms of Africa's exposure to the impacts of climate change. PACE is usually better-placed to understand the local conditions in Africa and so we can make sure that any carbon offset contributions are invested in credible activities. The nature of PACE projects is defined by local people and is not dictated to by the need to return shareholder profits or economies of scale.

Isn't carbon trading distracting people from the real challenge of reducing their emissions?

PACE encourages all investors to consider ways to reduce their emissions and proposes some easy steps that investors can follow. Investment in renewable technologies in developing countries typically has a far greater impact on emissions reductions than the same investment in industrialised countries, where things are more expensive to change. By investing in renewable energy projects in developing countries, PACE is assisting these countries on a development path that will not involve the same level of emissions as the development of current industrialised countries. Developing country investment in renewable energy places these countries at the forefront of emerging renewable sectors.

Will my contribution make any real difference to climate change?

Global warming is now accepted as one of the most serious threats to the future of all people on the planet. We must all take urgent action to reduce the amount of greenhouse gases that are currently being produced. The first step is to be more efficient when using energy - cutting down how much energy we use will reduce the amount of greenhouse gas that is emitted. When we can't easily cut our energy use any more, making a carbon offset contribution will allow PACE to make carbon savings in Africa that will help to compensate for your carbon emissions.

What sort of organisation is PACE - does it make any profits?

PACE is registered in South Africa as a "voluntary association" or "Universitas". The Association is a public, non-profit organisation. PACE has the support of the national Government in South Africa and from the Designated National Authority (DNA) for the Clean Development Mechanism. We were established with financial backing from the UK Foreign and Commonwealth Office. So PACE works to expand the carbon market in Africa, ultimately for the benefit of everyone!

Since PACE operates as a non-profit organisation, it is not making money for shareholders from the carbon offset contributions.

So what are the objectives of PACE?

PACE has been established for the following objectives, which are stated in our constitution:

To contribute to sustainable development and poverty reduction in Africa by improving access to renewable energy sources and energy efficient technologies for poor people. By assisting small-scale renewable energy and energy efficiency projects in Africa to access carbon market revenue in support of their efforts;To build local capacity and provide support services;To facilitate small-scale climate change activities in Africa by obtaining finance from private carbon offsets and public financial assistance.

How much of my contribution goes to making a credible carbon improvement in Africa?

Since PACE is a non-profit organisation with a single focus, all of the money that you contribute is used to fund credible carbon projects in Africa. This includes the direct expenses associated with the projects (at least half of the total, usually more) and the cost of PACE staff employed in project development and design, and in raising funds.

I want to know how my contribution is invested - can I decide which project to support?

You can choose which of Pace's projects you would like to contribute to. Because we take a hands on approach to project development, our project portfolio may not be as big as some companies, but this is part of the commitment to being credible. When you have selected a project, you can choose to receive project updates to understand the difference that your investment has made.

What's the Kyoto Protocol - doesn't this have a mechanism to help carbon emission reductions in Africa?

The Kyoto Protocol has set limits to the amount of greenhouse gases that can be emitted by affluent industrialised countries of the world. The Protocol has also established a "Clean Development Mechanism" (CDM) that allows for investment in developing countries. PACE has a track-record of assisting projects in South Africa with the CDM, but the process is very slow and costly and tends to favour large-scale industrial projects. So PACE spends most of its time working with voluntary carbon offset contributions, which achieve the reduction in emissions at lower costs and offer greater poverty alleviation potential.

Is my contribution to PACE just another way of helping rich country Governments to meet their Kyoto Protocol targets?

No! The voluntary carbon offset contributions that you make to PACE are not part of the Kyoto Protocol. Rich countries already have targets that they must meet so the emissions reductions from PACE's credible carbon projects will be additional - these reductions will not happen without extra funding.

Does PACE use the Emissions Trading Scheme of the European Union?

For the Kyoto Protocol, industrialised countries have agreed to legally-binding targets for their carbon emissions. Most companies have been given a fixed number of carbon credits that limits the amount of greenhouse gas that they can produce, and will be fined if they exceed this amount. The EU ETS is like a stock exchange for carbon credits. Companies who have spare carbon credits can sell to companies that need credits to avoid a fine - this is done through the EU ETS. But this scheme is only for companies in the EU, so PACE does not get involved.

How do we know that our offset contributions are really making a difference in Africa?

Unlike other organisations that work in this area, PACE maintains an updated record of what projects receive support form the carbon offsets, how the project is developing and what has been achieved. The project baseline (how much greenhouse gas is emitted before the credible carbon investment) is prepared at the start of the project, and the final results are measured and reported to the local authorities for assessment. The carbon savings and the development benefits are all recorded and presented on the website for all investors to see.

What's the difference between a "voluntary carbon offset" and a "CO2 Offset"?

Carbon is often used as an abbreviation for "carbon dioxide" when talking about voluntary offsets. But this is not necessarily the case when talking about other climate change issues such as carbon trading, or carbon footprints. In this case, carbon is referring to any greenhouse gases (GHGs) that contribute to climate change. The most common GHG is carbon dioxide, and this is the one that most of us can do something about since it results from using gas or coal (which often generates electricity). Carbon dioxide is also the standard unit of measurement for emissions - the carbon impact of all other gases is converted into the equivalent amount of carbon dioxide that would have the same effect. Most of our credible carbon projects involve energy efficiency (saving carbon dioxide) or renewable energy (avoiding carbon dioxide). But there are some that target other greenhouse gases, and the effect of these is converted into carbon dioxide equivalent in order to find the value of carbon offsets.

How does PACE calculate the CO2 emissions?

The carbon calculator on the PACE website will give you the amount of carbon that is emitted by your current activities at home, during personal travel, in your office building or for business visits. To work out this figure, PACE usually uses publicly available figures that convert energy use from different fuel sources into CO2 emissions. The only major exception is for electricity use, where the conversion rate differs depending on the composition of energy supplying the energy grid in specific countries.

Why do the carbon offsets from other organisations have different prices from PACE?

The price of a carbon offset is based on the cost of reducing an equivalent amount of carbon in a given project - the "marginal abatement cost". The cost or reducing a unit of carbon will differ across projects depending on their specific activities. In general PACE seeks projects that have a significant impact on poverty and emissions at a reasonable cost.

PACE acknowledges its need to be cost competitive elative to the global emissions reduction market, but has concerns about the impact of expedient large-scale industrial projects on the global carbon price - a concern that is shared by the World Bank, DFID, WWF and clearly articulated in the Stern Review (2006).

PACE pledges not to compromise the quality of its projects or the credibility of its off-sets by pursuing cheap off-sets. If you for a cheap paper transaction that will purport to make your lifestyle or company carbon neutral in exchange for a pittance we will gladly refer you to our competitors.

PACE is working to bring public funding to match private carbon offsets and so help reduce the price of offsets in Africa in the future.

How do you choose which projects to fund?

Because PACE operates from Africa, and is staffed by energy/environment experts from Africa, we know well the real energy needs in poor communities and the associated costs of energy efficiency or renewable energy projects. We also understand how to make these projects sustainable, so that the benefits will last much longer than the project. We also work with other locally-based development organisations that tell us of possible energy projects that will have carbon and development benefits.

But ultimately it is the investors that decide which projects are supported. PACE makes project opportunities available to investors through the website and the investor decides where to put the money!