What are Carbon Credits?
The Need
Existence/Evolution
Trading and Value
Generation
 

Carbon credits are a tradable permit scheme. It is a simple, non-compulsory way to counteract the greenhouse gasses that contribute to climate change and global warming. Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air. The Carbon Credit is this new currency and each carbon credit represents one tonne of carbon dioxide either removed from the atmosphere or saved from being emitted. Carbon credits are also called emission permit. Carbon credit is in the Environment and Pollution Control subject. Carbon credits are certificates awarded to countries that are successful in reducing emissions of greenhouse gases.
Carbon credits are generated as the result of an additional carbon project. Carbon credits can be created in many ways but there are two broad types:

  1. Sequestration (capturing or retaining carbon dioxide from the atmosphere) such as afforestation and reforestation activities.
  2. Carbon Dioxide Saving Projects such as use of renewable energies
These credits need to be authentic, scientifically based and Verification is essential.
Carbon credit trading is an innovative method of controlling emissions using the free market.


Need for carbon credits


Over millions of years, our planet has managed to regulate concentrations of greenhouse gases through sources (emitters) and sinks (reservoirs). Carbon (in the form of CO2 and methane) is emitted by volcanoes, by rotting vegetation, by burning of fossil fuels and other organic matter. But CO2 is absorbed, by trees, forests or by some natural phenomenon like photosynthesis and also oceans to some extent.

In modern times the burning of fossil fuels like coal, oil and natural gas – in which carbon has been stored for millions of years – combined with accelerated land clearance has led to exceptional levels of greenhouse gas emissions. Vegetation, largely forest, is already absorbing about one-third of human-induced emissions, planting more forests could increase absorption. Carbon sinks can’t keep up, and concentrations of greenhouse gases in the atmosphere have risen dramatically leading to an enhanced greenhouse effect which will result in very rapid warming of the world’s climate. more...


Existence of carbon credits


The concept of carbon credits came into existence as a result of increasing awareness of the need for pollution control.
Carbon credits were one of the outcomes of the Kyoto Protocol, an international agreement between 169 countries. The Kyoto Protocol created legally binding emission targets for developing nations. To meet these targets, nations must limit C02 emissions. It was enforced from Feb’05.
The very phase “Kyoto Protocol” has become synonymous with the idea of saving the planet from the global meltdown.
This can be accomplished by either reducing emissions or by absorbing emissions through processes such as tree-planting and sequestration
. more...


Trading of carbon credits

Buying carbon credits is not a charitable donation, but a retail action. Trade in carbon credits has the potential to make forestry more profitable and to sustain the environment at the same time.

One of the primary solutions for climate change being thought by global warming alarmists is the purchase and sale of carbon credits. For trading purposes, one credit is considered equivalent to one tonne of CO2 emissions. Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price. more..


Value of carbon credits


Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air such as carbon emitted by burning of fossil fuels. This means that carbon becomes a cost of business and is seen like other inputs such as raw materials or labor.

Carbon credits are measured in tonnes
of carbon dioxide.
 
1 credit = 1 tonne of CO2.

Each carbon credit represents one metric ton of C02 either removed from the atmosphere or saved from being emitted. The carbon credit market creates a monetary value for carbon credits and allows the credits to be traded.
For each tonne of carbon dioxide that is saved or sequestered carbon credit producers may sell one carbon credit. more...


Generation of carbon credits


Many types of activities can generate carbon offsets. Renewable energy such as wind farms, or installations of solar, small hydro, geothermal, and biomass energy can all create carbon offsets by displacing fossil fuels. Other types of offsets available for sale on the market include those resulting from energy efficiency projects, methane capture from landfills or livestock, destruction of potent greenhouse gases such as halocarbons, and carbon sequestration projects (such as reforestation) that absorb carbon dioxide from the atmosphere.
more...
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What are Carbon Credits?
The Need
Existence/Evolution
Trading and Value
Generation
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