Commercial and individual use of fossil fuels to create energy has been widespread for many decades throughout the world. However, fossil fuels let out hazardous greenhouse gases like methane and CO2, which result in a lot of harm to the environment. High accumulation of these greenhouse gases in the air is leading to global warming, with grave repercussions for the planet.
With the objective of reducing the emissions and safeguarding the environment, the idea of carbon credits was brought into existence. 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 set limits are then utilized by the country's government for allotting quotas to various industrial and commercial entities of how much emission they are permitted.
In order to encourage industries and other entities for releasing lesser than the quota and to punish those who emit more, the concept of carbon credits was developed. One carbon credit is equal to one ton of carbon dioxide released into the environment. In this novel scheme, manufacturing units or firms that emit greenhouse gases within the prescribed quota can sell carbon credits of an amount corresponding to the difference, while those units that emit more will have to purchase an equivalent amount of carbon credits from the market.
Such carbon credits trading motivate lesser emissions and thereby decrease unregulated emissions of greenhouse gases in the air. The trading of carbon credits has made companies pay for their emissions, and it now has a direct effect on the firm's financial analysis. This has caused firms to actively seek means to reduce their emissions and adopt cleaner ways of doing business.
Another emission controlling financial strategy is the carbon offset credit, which serves a very similar objective. A carbon offset credit is equivalent to one thousand kilograms of CO2 or equivalent greenhouse gas decrease in the atmosphere. Making use of cleaner and renewable energy sources like wind and tidal energy helps to achieve this important decrease.
A carbon offset is purchased by companies or other organizations to balance the emissions that exceed their allocated quotas as per the rules. Carbon offset is open for governments, companies and even an individual who can offset their carbon footprint through it. This helps in promoting and funding decrease in emissions and furthering eco-friendly efforts of production of energy.
With the objective of reducing the emissions and safeguarding the environment, the idea of carbon credits was brought into existence. 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 set limits are then utilized by the country's government for allotting quotas to various industrial and commercial entities of how much emission they are permitted.
In order to encourage industries and other entities for releasing lesser than the quota and to punish those who emit more, the concept of carbon credits was developed. One carbon credit is equal to one ton of carbon dioxide released into the environment. In this novel scheme, manufacturing units or firms that emit greenhouse gases within the prescribed quota can sell carbon credits of an amount corresponding to the difference, while those units that emit more will have to purchase an equivalent amount of carbon credits from the market.
Such carbon credits trading motivate lesser emissions and thereby decrease unregulated emissions of greenhouse gases in the air. The trading of carbon credits has made companies pay for their emissions, and it now has a direct effect on the firm's financial analysis. This has caused firms to actively seek means to reduce their emissions and adopt cleaner ways of doing business.
Another emission controlling financial strategy is the carbon offset credit, which serves a very similar objective. A carbon offset credit is equivalent to one thousand kilograms of CO2 or equivalent greenhouse gas decrease in the atmosphere. Making use of cleaner and renewable energy sources like wind and tidal energy helps to achieve this important decrease.
A carbon offset is purchased by companies or other organizations to balance the emissions that exceed their allocated quotas as per the rules. Carbon offset is open for governments, companies and even an individual who can offset their carbon footprint through it. This helps in promoting and funding decrease in emissions and furthering eco-friendly efforts of production of energy.
About the Author:
Learn more about Carbon Credits and Carbon Offset and get a deeper understanding on how you can help in saving the environment.
No comments:
Post a Comment