How Carbon Credits Help In Lowering Greenhouse Emissions
Fossil fuels have been used as the main source of energy for many decades now in all kinds of industries as well as for individual use. However, fossil fuels give out hazardous greenhouse gases like methane and carbon dioxide, which result in a lot of harm to the environment. The emissions have led to an ever increasing concentration of these hazardous gases in the air, giving rise to global warming, which can be disastrous for earth.
The carbon credit system was a direct result of the need to control emissions and protect the environment. Through the famous Kyoto protocol, an agreement among over 170 countries, it was decided to set limits on emissions of greenhouse gases by every participating country. The nation’s administration then uses the agreed limits and assigns quotas to manufacturing units, identifying the amount of emissions they are permitted to make.
In order to reward industries and other organizations for emitting lesser than the quota and to punish those who emit more, the concept of carbon credits was brought into the picture. One thousand kilograms of carbon released in the atmosphere is equivalent to one carbon credit, according to its definition. Under this idea, manufacturing companies have to buy a precise amount of carbon credits from the international trading market if their emissions are more than the quota, whereas those firms that are under their emission quota can sell an equivalent amount of carbon credits.
Such carbon credits trading encourage lesser emissions and thereby decrease unregulated emissions of greenhouse gases in the environment. The market of carbon credits has made emissions an internal cost of doing business, which is now reflected in the financial reports. This has caused firms to actively seek ways to reduce their emissions and opt for cleaner methods of doing business.
Another emission controlling financial scheme is the carbon offset credit, which serves a very similar purpose. A carbon offset credit is equal to one metric ton of carbon dioxide or equivalent greenhouse gas reduction in the atmosphere. Using greener and renewable energy sources like wind and solar energy helps to attain this crucial reduction.
Like carbon credits, a carbon offset is purchased to offset the emissions that go above the prescribed limits for a firm so that it is able to comply with the emission regulations. Persons, governments and organizations can all purchase it voluntarily as well to offset their carbon footprint. Thus, they are able to support and provide funds for the decrease in greenhouse gases and to promote cleaner techniques of energy generation.
Learn more about carbon credits and carbon trading and get a deeper understanding on how you can help in saving the environment.
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