Protecting The Environment With Carbon Credits
The dangerous levels of hazardous greenhouse gases such as CO2 in the atmosphere has resulted in global anxiety about the increasingly destructive impact they have on the environment. Instruments like carbon credits and carbon offset were devised in order to improve the scenario by incentivizing firms which are more environment friendly in the way they run their business.
The idea of carbon credits was introduced recently. A single carbon credit provides the authorisation for emission of one tonne of CO2 or a similar amount of any other greenhouse gas into the atmosphere. The overall amount of emissions throughout the world can be capped through the carbon trading method in which carbon credits can be sold and purchased.
Carbon credits are allocated among organizations to limit the amount of greenhouse gases such as CO2 that they emit. A firm engages in carbon trading when its emissions are over and above the levels permitted by its carbon credits quota, in order to buy credits from those organizations that have used greener techniques and have spare carbon credits.
Hence, total carbon emissions remain under the agreed levels, and organizations are encouraged to use eco friendly ways of carrying out their work that lower the amount of gases released by them and save them from extra expenditure to be made on carbon credits. The system also incentivizes more eco friendly companies and they are encouraged to keep improving so that they can enhance their earnings by selling carbon credits.
Carbon credits can be bought like any other commodity because they are sold in an open market and there are several agencies that trade in them. You can purchase carbon credits even if you are not a member of any company in order to reduce your own carbon footprint. The amount that you invest in this manner is channelized towards funding ecological projects in any region in the world so that the emissions made because of your actions can be neutralized.
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