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

 


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.

Under the Kyoto Protocol, developed countries are required to limit their greenhouse gas emissions according to the following formula:

Actual emissions must be less than or equal to the assigned amount +/- carbon sinks and Kyoto emissions.
They are a measure devised by the Kyoto Protocol to reduce world Greenhouse Gas emissions, and hence fight climate change.

Carbon credits are certificates awarded to countries that are successful in reducing emissions of greenhouse gases such as water vapor, carbon dioxide, methane, nitrous oxide, and ozone.



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