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Because of recent increases in greenhouse gas emissions, policy makers have tirelessly sought out ways to mitigate this problem. Carbon Credit trading is a commonly used approach to this issue. Carbon credit is a generic term used to identify any tradable certificate representing the right to emit one tonne of carbon dioxide with another greenhouse. Carbon credits are a component of national and international attempts to mitigate growth in the concentration of greenhouse gases. The ultimate goal of carbon credits is to eradicate the increase of carbon dioxide emissions. The carbon credit system calls for countries to honor their emission quotas and offer substantial incentives for being below them.The equivalent of one carbon credit amounts to one metric tonne of carbon dioxide or carbon dioxide equivalent gases. This application of emissions trading approach is to cap greenhouse gas emissions, and then allocate the emissions among regulated sources. The belief is this process will allow market mechanisms to drive both industrial and commercial processes in the direction of low emission or significantly decrease carbon intensive approaches. Greenhouse gases mitigation projects generate credits, through these credits finance can be used for carbon reduction schemes between partners around the world. Major sources of greenhouse gases are industrial emissions such as carbon dioxide, nitrous oxide, methane and hydro-fluorocarbons. Climate changes are created when these gases reach the atmosphere, because of their ability to hold in energy reflected from the sun and then use this reflected energy to emit radiation back down to earth producing a greenhouse effect.

Carbon trading is a common practice amongst companies, businesses, and countries. Each country or group is allotted a certain amount of carbon credits to be used over a certain period of time. These credit emissions are typically sold when carbon credits are below allowance. However, if the limit is exceeded, companies may purchase credits from other businesses. Oddly enough, when these credits are used in trade, the real issue is a matter of being paid to either pollute or not. This is where the emissions cap is most prevalent to the carbon credit process. Due to the effect of this cap on individual companies, the trade is reduced to overall emission reductions. Emissions limits and trading rules vary from country to country. For those nations who have signed the Kyoto Protocol, a different approach must be taken. The Kyoto Protocol holds companies accountable for their own Co2 limit, greenhouse gas emissions trading is mandatory.

The Acid Rain program is good example of the effect the cap and trade program has on carbon credit trading. Under this United States developed program, the levels of acid rain have decreased by forty percent. Professionals in the industry have said there is no questioning the advantages carbon credit trading can provide to governments and consumers. When companies use buy, and sell carbon credits they reduce their energy consumption, which is good for the environment, the company, and the consumer. Ultimately saving money on energy cost, carbon credits present many benefits that can save potential users countless dollars. Industry watchers say carbon markets will continue to grow at a rapid pace, especially in the United States. Although it currently does not have one,it is widely believed that the United States will eventually develop a cap on carbon emissions. As legislators are already pushing the issue to congress. Surprisingly, more and more employees taking this into account when choosing where to work. This shows the importance and relevance of the greenhouse effect and the effect its having on everyday people. It is believed that the willingness of past companies to pollute the ozone layer is the reason for current problems people face today. It's imperative that you continue in the fight against pollution and the effects it has on everyday life.