Carbon Credits - The Effective Way to Reduce Global Warming

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    Nov 15, 2012
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In a nutshell, carbon credits refer to elements that can help regulate gases before they are sent into the atmosphere. These elements are generally part of a bigger plan that is currently being made to reduce the effects of global warming.

How Does This Plan Work?

Carbon credits basically work by capping the total emissions that a business or company could release. If the gases experience a shortfall, they might get traded for money. Sometimes, these credits fund the plans of carbon reduction between two different trading partners, too. Although these credits get traded from one business to another quite often, they also tend to get bought and sold within international markets, depending on their market value.

As mentioned earlier, the main goal of carbon credits is to reduce the effects of global warming. However, there are several detractors out there that claim that the plan is focusing more on making money than on saving the earth itself.

So far, more than 170 countries the world over are a part of the credit program, which makes use of the Kyoto Protocol. Overall, the goal of this group is to meet the targets of emission reduction.

How Are These Credits Used?

There are also different countries and people that work together to reduce their carbon footprint and save the environment. Although it may not be mandatory for them to put carbon credits to use, they are at least adamant in using them properly. A lot of companies also sell credits to these countries and people that want to make a real difference in the world.

The process needed to be followed for this is quite complicated; but basically, carbon off-setters will purchase credits from investment funds or from carbon development companies and have credits taken from individual projects.

How Do Carbon Projects Help?

Carbon projects might concentrate on specific areas, like fuel-switching, reforestation, energy efficiency, carbon storage and carbon capture. Most of them tend to deal with options for renewable energy, though. This means that they might work with biomass to create biofuels or focus on advancing and creating wind turbines to create wind power. Other vital areas of alternative energy would involve solar panels, solar heating and solar lighting.

Since the quality of carbon credits is greatly based on their sponsors' validation process, a lot of trust has to be placed on these sponsors to ensure that the credits are managed properly at all times.

How Did This Project Come to Life?

The main reason that brought this entire project to life is the fact that industries all over the world have been burning fossil fuels over and over again. By using carbon credits and managing them properly, companies can become more responsible and make more money at the same time.

This project is still considered to be quite new, though, so it is still hard to figure out how the credit issuance is being seen and received. Hopefully, as the years go by, it will show real efficacy and, in turn, determine any adjustments that may need to be done in the future.

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