How Carbon Credits Help In Reducing Carbon Emissions
For ages, humans have been using fossil fuels for consumption in all types of endeavours as the primary means of energy. However, release of greenhouse gases like methane and carbon dioxide is caused by fossil fuels, which is quite hazardous for the environment. The emissions have led to an ever rising concentration of these hazardous gases in the air, leading to global warming, which can be destructive for earth.
With the objective of reducing the emissions and safeguarding the planet, the concept of carbon credits was introduced. The well known Kyoto protocol witnessed over 170 participants agreeing to fix standard limits on greenhouse gas emissions in their respective countries in a phased manner. The nations’ government then makes use of the prescribed limits and allocates quotas to different manufacturing units, fixing the cap for emissions by them so that their business activities do not result in excessive emissions.
In the carbon credits scheme, the manufacturing units that emit greenhouse gases more than the prescribed quota are punished while those producing less are rewarded. According to its definition, one carbon credit is equivalent to one ton of carbon dioxide emitted in the atmosphere. Under the scheme, the entities which emit above the limit have to buy an equal amount of carbon credits for such emissions from the global trading market and entities that are below the prescribed emission levels can sell a corresponding amount of carbon credits for the disparity between their quota and there emissions.
Such carbon credits transactions motivate lesser emissions and thereby decrease unregulated emissions of greenhouse gases in the air. Companies are made to pay for their adverse impact on the environment under the carbon credits policy, and this now has a huge impact on their financial results. Companies have thus woken up to the need of cutting down their emissions and look for environment friendly business options.
Carbon offset credit is another innovative solution to control greenhouse gas emission, which follows a similar strategy. A carbon offset credit is equivalent to reduction of one metric ton of carbon dioxide or corresponding greenhouse gas in the air. This CO2 decrease is obtained by using alternative and eco-friendly energy sources like tidal and wind energy.
A carbon offset is bought just as carbon credits to offset the excess emissions of that specific organization over and above the allocated caps for abiding by the regulations. Carbon offset is available to governments, companies and even the common man who can offset their carbon footprint through it. Thus, they are able to support and provide funds for the reduction in greenhouse gases and to promote cleaner techniques of energy generation.
Discover more about Carbon Credits and Carbon Offset and get a deeper understanding on how you can help in saving the environment.
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