Carbon Trading: General Information

Posted under environment by Emily Roberts

Carbon trading is a concept we may or may not be familiar with. We may have heard of it, but not know what it is about & how it works to lower the carbons being given off to our air.

So how does the carbon emissions trading scheme function? An administration basically figures out how much carbon emissions are sent into the air by every industry. It then lowers the total percentage to meet their international responsibilities. Every industry has to then meet the lowered target or pay a fee depending on how much they are over. When an industry lowers its emissions below the level, it can sell their unused amount to other companies who may need more carbon credits to avoid fines.

Just how are these companies suddenly reducing their carbon emissions? How are these lowered emissions enough to observe the government’s prerequisites and still be enough to allow them to sell to their contemporaries as carbon offsets? You’d think if it is possible now, it is most likely possible back then. The fact of the matter is, industries are more probable to be more sensitive to these issues when fines are involved.

There is one deadly blemish however: carbon trading can & most likely will affect the consumers. Because companies might suffer from big fines coming from carbon trading, they can charge the people so their profit is still present even if they pay fines. There is still space for betterment, of course, because carbon trading is generally a new concept not many people know of.

The good thing about carbon trading though, is that even if it isn’t perfected at the moment, it has helped the environment a great deal already. According to the World Bank’s Carbon Finance Unit, 374 million metric tonnes of carbon dioxide equivalent (tCO2e) were exchanged through projects in 2005. It signifies a 240% increase comparative to 2004 (110 tCO2e) which was itself already a 41% increase compared to 2003 (78 tCO2e).

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