Our Calculations

Alaska Carbon Reduction Fund heat pump installations to date have eliminated an average of 500 gallons each. This important data point is one of many that the Alaska Carbon Reduction Fund uses to calculate the cost of carbon for our program. Weather, jet seating capacity, sea conditions, fuel efficiency, shipping rates, equipment costs, contractor fees, and an array of other factors all interact to complicate the calculations. There is no end to how far one could drill down into the nitty gritty to make a precise determination of true carbon cost. 

Like other carbon reduction programs, the Alaska Carbon Reduction Fund has had to make assumptions. At the same time, we have scoured the great work of many researchers and carbon experts from government agencies, major airlines, to university climate specialists, for the most accurate numbers possible. We believe our calculations to be honest and true. Most importantly, we know that the cost of our carbon products align with the emissions savings of our carbon elimination program, meaning your purchase will directly remove the equivalent amount of carbon from the atmosphere that you choose to finance. This is the most important aspect of our carbon reduction program – trust.  

There are two primary estimates we make in our carbon calculations: your carbon emissions and the cost of eliminating those emissions.

Your carbon reduction purchase for # pounds will prevent the production of # pounds of carbon by eliminating the burning of a corresponding quantity of heating oil. We offer you a true one-to-one carbon reduction solution.

Your carbon emissions: There is tremendous variation in the carbon you are responsible for depending on the size and type of aircraft, ship, car, or home heating system used, not to mention weather and an array of other factors. Examples include an individual’s share of a flight’s carbon creation, a traveler’s share of the carbon emissions from a diesel jet boat whale watching excursion, or a home owner’s carbon output from heating with an oil-burning stove. Like other carbon reduction programs, the Alaska Carbon Reduction Fund has had to make some assumptions based on expert studies in published reports. We believe our numbers to be honest and accurate. 

The cost of our reduction products: Our calculated cost of carbon is based on the gallons of heating oil not burned once an air source heat pump is installed in a home to replace or supplement an oil heat system. This is a forward-looking calculation that projects an annual average savings in carbon emissions across the number of years of estimated useful life of the heat pump. The average annual heating fuel (diesel #2) used by Alaska Carbon Reduction Fund households to date is 500 gallons. When burned, a gallon of diesel creates 22.4 pounds of CO2 emissions.

Annual revenue for the Alaska Carbon Reduction Fund is a mix of roughly 50% donations and grants and 50% targeted carbon reduction purchases. We use donations and grant awards to ‘subsidize’ the cost of our carbon reduction projects. In essence, this reduces the cost of our carbon offset products to those seeking carbon footprint reduction assistance. At the end of the day, this fiscal balancing act reduces our carbon offset per pound cost from $0.042 to $0.021. Each year we revisit the donation / carbon reduction balance.

These values work together to derive a per pound cost for our carbon reduction products of $0.021 / pound. In carbon credit terminology, our carbon cost is $46 for one carbon credit (1 tonne of carbon).

Below are listed some of the data sources that we have used to generate our numbers. We realize there are many different studies and considerations to assist in determining the climate impacts of different activities so we’ll be reviewing and updating our assumptions about our product costs periodically.