Decreasing Greenhouse Gas Emissions Through Carbon Credits

With the amount of CO2 and other greenhouse gases in the atmosphere reaching alarming levels, there has been growing worldwide concern about the great damage they cause to the environment. Instruments like carbon credits and carbon offset were devised in order to improve the situation by incentivizing firms which are more eco friendly in the manner in which they conduct their business.

The concept of carbon credits was introduced recently. A single carbon credit provides the permission for release of one tonne of CO2 or a similar amount of any other greenhouse gas into the atmosphere. Through the purchase and sale of carbon credits in the carbon trading system, the overall level of global emissions can be controlled.

Carbon credits are allocated among organizations to cap the amount of greenhouse gases such as carbon dioxide that they emit. Carbon trading is used when the organization’s emissions go beyond its quota of carbon credits, forcing it to buy credits from others who have opted for more ecological ways of functioning and thus have carbon credits to spare.

Hence, the worldwide carbon emissions stay below the agreed limits, and organizations are incentivized to adopt more environment friendly manufacturing practices in order to decrease emissions so that they do not need to incur expenditure on the purchase of carbon credits. The system also incentivizes more eco friendly organizations and they are encouraged to keep improving so that they can enhance their profits by selling carbon credits.

Carbon credits can be purchased just as any other product because they are sold in an open market and there are several agencies that engage in this trade. In fact, even if you are not trading on behalf of a firm, you can choose to purchase carbon credits so as to lower your carbon footprint. The amount you spend in this way is used for sponsoring ecological projects that are running across the world in order to counterbalance the impact of emissions from your activities.