A range of terms are used to discuss the use of offsets. At the moment we use carbon credits, but a lot of different financial instruments are being created.
We can define a carbon credit (or other financial instruments) as a certified and transferable instrument representing one tonne of CO2 or equivalent greenhouse gases that have been avoided or removed. (Here “avoided” means the gases did not enter the atmosphere, while “removed” means the gases were removed from the atmosphere and safely stored.)
Credits (or other financial instruments) are created by (in our case) Blue Carbon (offset) projects and can be retired to “offset” the equivalent volume of residual emissions by the holder of the credit.
The co-benefits of these credits encompass the social and environmental aspects (see Blue Carbon).
Meaning that the effects of the income generated by these credits for the local economy, local people and livelihood is much broader than the development of the Blue Carbon projects only.
Through the proceeds coming out of the credits, which are long-term contracts (comparable with a perpetual bond), the projects can be continued, managed and sustained. However, the blue carbon credits are investment products (with attached and similar risks). The expectation is that the value will increase substantially in the coming era, thanks to increasing demand and a supply which drops substantially behind. Therefore, the income for the local government, people and economy will increase. This can have a positive effect on a decrease in poverty and added benefits, better economic circumstances and if invested properly we would be an advocate for more self-sufficiency in food, growth of eco-tourism etc.