Carbon Credits | Frequently Asked Questions
Carbon Credits and Cool Effect 101
- What is Cool Effect?
Cool Effect is a nonprofit dedicated to helping individuals, organizations and businesses of all sizes reduce their carbon emissions then offset what remains with the highest quality carbon offsets on the planet. We are dedicated to Carbon Done Correctly the foundation for our scientific rigor and our price transparency. We are not carbon brokers. We represent the highest quality carbon projects around the global and connect them with anyone who wants to buy carbon offsets. We are here to help any person or organization with their journey to carbon neutrality.
- Is Cool Effect a 501(c)3? Is my donation tax deductible?
It sure is! Any donation to Cool Effect is considered a tax deduction. We use your donation (less our 9.87% fee) to buy carbon offsets from registered and reviews projects on your behalf.
- What is your Tax ID number?
Tax ID 47-5068496
The system will provide an immediate payment receipt with this number for your records.
- Where can I find Cool Effect’s annual returns and reports?
Right here. Additionally, if you are looking for Form 990, click here for 2022, click here for 2021, click here for 2020, click here for 2019, click here for 2018, click here for 2017 and click here for 2016.
- Why isn't this organization rated by Charity Navigator?
7 years of full IRS Forms 990 are needed to complete a rating, Cool Effect was founded in September 2015. In the meantime please check us out on Guidestar!
- How much money do you keep from my donation?
Over 90% of your donation goes straight to projects that reduce greenhouse gases, which are the major cause of climate change. Your donation, less our 9.87% fee, is used to purchase carbon offsets on your behalf.
9.87% is used to cover the following:
- Payment Processing Fee: 2%–4%
- Registry Fee (where applicable)
- Research Fee: 1.5%
- Remainder goes toward a Cool Effect Administration Fee.
- What is Carbon Done Correctly?
Carbon Done Correctly is our commitment to any buyer of carbon offsets from our platform. Carbon Done Correctly was created to provide assurances to individuals, organizations and businesses who want to purchase the highest quality carbon offsets demonstrating a true carbon benefit, full transparency in pricing, and secondary benefits.
- Rigorous scientific analysis of all projects on the platform including additionality
- Disciplined approach when reviewing both scientific data, business practices, and pricing
- Commitment to Cool Effect’s mission to provide a simple and transparent way for individuals, organizations and businesses to have a measurable impact on the fight against the climate crisis
- What is The Seller’s Pledge?
The Seller’s Pledge is a key component to Carbon Done Correctly, the basis for Cool Effect’s legal commitment to pricing transparency. The Seller’s Pledge commits to the following:
- Carbon credit pricing is always transparent, the buyer and developer know the price
- Fees are always fully disclosed
- No hidden fees or undisclosed markups
- In some instances, Cool Effect invests capital to help a project grow in exchange for future credits and those credits will be sold at market price
- Every project represented is triple-verified to ensure quality
Learn about carbon credits and carbon offsets
- What is a carbon offset?
- A carbon offset is a reduction of carbon emissions to compensate for an equal amount of emissions from another source. A carbon offset is measured in metric tonnes.
- What is the difference between a carbon offset and a carbon credit?
‘Carbon offset’ and ‘carbon credit’ are terms that are generally used interchangeably. ‘Carbon credit’ is more often used in reference to a financial unit of measurement that represents the removal of one tonne (1,000 kg or 2,205 lbs.) of carbon from the atmosphere.
‘Carbon offset’ is often used when referring to an action. Carbon offsets or carbon credits have the same function to compensate for emissions occurring elsewhere (via reduction, avoidance, or sequestering).
- What is the unit of measure used to establish carbon offsets?
- Carbon offsets are measured in metric tons (tonnes) of carbon dioxide equivalents (mTCO₂e). One tonne = 1,000 kg or 2,205 lbs and is about the size of a two-story home. For each tonne mitigated by a carbon project, one carbon credit is issued.
- What is the difference between the compliance carbon market and the voluntary carbon market?
The compliance market is driven by national, regional or international law stating that companies and governments must account for their greenhouse gas emissions.
The voluntary market is the voluntary offset of emissions by a company organization or individual. Cool Effect represents carbon credits to be used by the voluntary market.
- How much does it cost to buy carbon credits in the voluntary market?
Carbon is an unregulated market and pricing is often confusing. The price per tonne on Cool Effect ranges from $3.50 – $14. Here are the components that factor into the price of a carbon credit:
- Location of the project
- Type of project
- Supply and Demand
- Secondary Benefits
- Age of credit
Cool Effect is dedicated to transparency in pricing and encourages the industry to do the same.
- Why do carbon credits vary in price on your website?
- When you’re dealing with carbon projects all around the world, you’re bound to run into some logistical differences. The projects featured on Cool Effect support different entrepreneurs in different parts of the world using different kinds of technology to cut carbon emissions. These technologies also cost different amounts depending on up-front costs, maintenance costs, and the price of materials in that region of the world.
- Why do Cool Effect carbon credits vary in price from carbon credits from other sources?
Carbon credits range from less than $1 to $45 per tonne of carbon dioxide equivalent (CO₂e). Most prices for well managed and regularly verified projects tend to be between $3 and $14 per tonne.
Prices can also vary because of added fees. Cool Effect has a 9.87% fee which is included in the price per tonne. We do not mark the price up to the nearest dollar and we do not buy credits for a low price and resell them at a higher price.
If projects are selling credits to the California Compliance market, minimum prices will be high due to the scarcity of these kinds of credits. Projects of consistent quality often command higher prices too. If a project sells for less than a few dollars per tonne it is hard to see how the sale of carbon credits can have a real impact on the project operations and buyers should beware of true additionality. For this reason, unless the reason for the low price is explicitly stated, we recommend skepticism for very cheap credits. However, Cool Effect has a stable of high-quality projects offering very competitive prices.
- What is Environmental Integrity?
This is key to Cool Effect’s mission. Environmental Integrity refers to how well a carbon credit substitutes for a greenhouse gas reduction that would otherwise be made by the entity using the offset. In other words, the credit you purchase should be as good as what you would do yourself.
- Are there different types of carbon credits?
Carbon credit projects are based on the principles of widely accepted mechanisms for reducing emissions. There are various methodologies for reducing emissions including providing clean cookstoves, preserving forests or grasslands, capturing methane, or running small-scale renewable energy projects. Each project offers metric tonnes of CO2 equivalents for sale. One good source for learning more about various greenhouse gas reducing methodologies, many of which can generate carbon credits, is the book Project Drawdown.
Cool Effect Carbon Projects
- How does Cool Effect select carbon projects?
Every project on Cool Effect’s platform is triple-verified, starting with a review and verification from one of the world’s major carbon standards—the Gold Standard, the Verified Carbon Standard, the Climate Action Reserve, the American Carbon Registry, or the United Nations’ Clean Development Mechanism.
Once that’s complete, our Director of Project Research Siddarth Yadav, verifies the project against a second set of international standards, such as those required by the United Nations Framework Convention on Climate Change. From there, we review the project internally with a long checklist that includes questions such as:
- Has the project been issued carbon credits by a major carbon standard?
- Is this carbon project additional?
- Is the science of the project verifiable?
- Are the project’s financials in order?
- Is the project being run by competent, experienced management?
- Have we visited the project site (when possible)?
Once we have satisfactory answers to all of our questions and if all these criteria are met, the carbon project can be considered officially verified and added to the Cool Effect platform.
- What does “additional” mean?
- The concept of “additionality” is really important to us. This means that to qualify as a genuine carbon offset, the reductions achieved by a project need to be “additional” to what would have happened if the project had not been carried out. The project is not awarded carbon credits for simply running a “green-friendly” business—only carbon credits from projects that are “additional to” the business-as-usual scenario represent a net environmental benefit. Your donations to additionality-focused projects like ours are reasons why we can verifiably claim that the amount of carbon being emitted into the atmosphere is being reduced. So, basically: because these projects exist, the amount of carbon emissions entering the atmosphere is less than it would have been without them.
- Are these offsets verified by a third party?
- Yes. All carbon credits on the Cool Effect platform are from carbon projects that have been certified by one of the major international carbon credit standards, such as The Gold Standard, Verra or the Climate Action Reserve. Cool Effect then does a deep due diligence on all projects to determine which projects are worth your support. We evaluate the implementation of the methodology and confirm that the project uses the majority of the proceeds from carbon for growth and not profit.
- How are GHGs reduced when donating to a project?
- One common thread that connects all of the projects on Cool Effect is that they verifiably prevent greenhouse gases (GHGs) from reaching the atmosphere. Each project focuses on improving or developing carbon emissions reduction technology (such as cookstoves or biogas digesters). We also verify that all our projects are “additional.”
- How are the projects monitored?
- Each project is monitored by the standard, an independent auditor, and Cool Effect each year. Our Director of Project Research, Siddarth Yaddav, has years of experience verifying and monitoring carbon projects and ensures that the project is proceeding as planned. We make field visits to the projects as well to review their work on-site.
- What is REDD+?
- REDD+ is an acronym for Reducing Emissions from Deforestation and Forest Degradation. REDD+ is a United Nations-backed initiative that provides financial incentives for communities, regions and countries to keep forests intact, thereby preventing carbon emissions caused by deforestation. REDD+ projects are designed to protect forests from illegal logging, forest fires, conversion to pasture or crop land and often provide significant social benefits to local communities plus enhanced biodiversity. REDD+ projects are monitored and verified by a recognized third-party auditor to prove they have successfully executed the relevant methodology set by an international carbon offset standard. Then the standard issues Verified Emission Reductions (VERs) that are also known as offsets or carbon credits. These issued credits can be sold to entities that want to voluntarily offset their unavoidable emissions.
- What REDD+ projects are represented by Cool Effect?
- The projects on the Cool Effect website have been carefully reviewed for scientific and financial additionally as well as strong community co-benefits. Projects include Grasslands Water Wildlife in Kenya, Seaside Conservation in Guatemala, For Peat’s Sake in Indonesia and Amazon Rosewood Conservation in Brazil. Click on each project for more information on how they fit The Cool Effect Model.
- How can I be sure these projects are sequestering and preventing the release of the amount of carbon you say they are?
- Our triple verification process is methodical, detailed, and time-consuming for a reason. We’ve vetted these projects using this process to ensure, without a doubt, that these projects are doing what they claim to do.
- Why are you listing the challenges for every project?
Every project, no matter how good it is, has challenges. We believe it’s important to present you with the full details on each project, even if those details include what the project is working to make better. We do this so supporters can see and understand what they are supporting and make informed choices about how to best protect the environment.
- Can I see where my donation went?
Each quarter we send buyers who have opted in to receive our email a feature story from a project. If you made a purchase on behalf of a business for over 10,000mt, we will send you an annual report including metrics from the project you supported.
Buying a Carbon Offset and Making a Donation
- What is the difference between buying a carbon offset and making a donation to Cool Effect?
- There is no difference. Each time a customer transacts on our website, we use the money less our fee of 9.87% to buy carbon offsets on behalf of our community.
- How can I buy?
If a particular project appeals to you, simply select that project, pick the amount of tonnes you’d like to offset, and voilà, you’ve taken action for Earth.
If you’d rather share the wealth and donate equally to all our projects, that’s an option too. Just enter your donation in dollars, and we’ll apply it to the entire portfolio of projects.
If you want to use a calculator such as travel offset or annual business operations offset, simply enter the data requested and you will see a carbon footprint and a cost based on our average price per tonne at that time. If you proceed with the carbon offset, your funds will be divided evenly among all projects.
If you know your emissions in tonnes, click “Already know your output?” from any window and it will allow you to enter tonnes and produce a cost. If you proceed with an offset, your funds will be divided among all projects.
Make a gift! You can also contribute to the fight against climate change on someone else’s behalf. Just visit our gift center to see how.
- What forms of payment does Cool Effect accept?
For donations and purchases through the website, we accept:
- Credit Card (Visa, Mastercard, Discover, American Express)
- Google Pay
- Paypal (Visa, Mastercard, American Express, Discover)
For donations or payments for invoices we accept:
- Wire ($25 fee added to the invoice)
- Donor-Advised Funds
- Money orders
- Cashier’s Check
We do not accept cryptocurrencies, grants, or stock donations. If you have a question about a payment not on this list please email Info@cooleffect.org.
- Why does each project charge a different amount for a tonne of carbon?
- When you deal with projects all around the world, there will be some logistical differences. The projects featured on Cool Effect support different carbon projects in different parts of the world using different kinds of technology to cut emissions. These technologies have a variety of costs depending on up-front costs, employment, maintenance costs, and the price of materials and wages in that region of the world.
- How do I change the credit card if I give monthly?
- As of now, we do not have the ability to update credit cards in our system. For your security, we’ve chosen not to keep credit card numbers on file. If you have a new card, please create a new subscription using the card of your choice and cancel your current subscription by logging in to your account and clicking on “manage subscriptions.”
- Do you offer refunds?
No, we cannot. When you buy a carbon offset from a project featured on Cool Effect, we send the money to the project and retire the carbon credit on the proper international registry. This ensures that your tonne cannot be sold twice and that the carbon benefit is captured. Once the carbon credits are retired we cannot un-retire them or have your purchase refunded.
- Where is my personalized certificate?
- Please check your SPAM folder first! Once you fill in the personalized details for your credits and pay online, you will receive a payment confirmation email. At the bottom is a link to download your certificate. Once you click the link to download look for your certificate on your desktop or your downloads folder based on your browser preference. And if you still don’t see it, please write to us at email@example.com, and we will be happy to resend!
- Are there other ways I can help beyond donating money?
- Every single person on the planet is capable of taking active steps to reduce their carbon footprint—from the car you drive, to the light bulbs you use, to the way you eat—even if it doesn’t involve a donation.
- What happened to gifts?
Starting February 1st, 2021 Cool Effect decided to remove Gifts from the website.
CO₂ and Climate Change
- What is carbon pollution and how is it caused?
- Carbon pollution refers to the carbon emissions generated by human and other activities and released into Earth’s atmosphere. Since the Industrial Revolution, this amount has increased exponentially and has led to a disruption of the natural carbon cycle.
- Visualize a tonne of carbon emissions. How does it relate to a carbon credit?
- A tonne is about the size of a 2-story home. Carbon emissions are measured in tonnes across the globe. Tonnes are used to determine a carbon footprint which can then be offset by purchasing the same amount of verified carbon credits.
- What is offsetting?
- Offsetting occurs when you take additional action to measurably reduce carbon emissions that can compensate for the carbon emissions you produce or helps to avoid or sequester the emission that are harmful to the planet.
- How much do I need to donate to offset my carbon footprint?
- Humans emit carbon just by living, with Americans emitting approximately 17 tonnes of carbon pollution per year. You likely emit more or less depending on certain factors (air travel, home efficiency, daily commute).
- Carbon dioxide is needed for photosynthesis, how can it be bad for the environment?
- Having too much of something is never good and having a higher concentration of CO2 in the atmosphere has led to warming of the planet. This increased heat has negatively effected our climate and impacted every living species.
- How can I convince my friends that climate change is real and human-caused?
- Convincing someone who actively chooses to ignore science and data can be a tricky thing, so your best bet before approaching that conversation would be to read up on the issue, keep your discussion polite (unless you don’t want to be friends with them after this), and come prepared with decent rebuttals to the most common talking points. Here’s a great place to start.
- How can I learn more about my carbon footprint?
- Visit our Why Carbon page with information on carbon emissions for the individual.