Carbon Emission Credits

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What are carbon emission credits?

Carbon Emission Credits

With the rise of environmental awareness, more and more companies are working to reduce the amount of greenhouse gasses they release to the atmosphere, namely carbon dioxide. As a way to gauge the amount of these gasses that a company produces, each company is assigned a carbon emission limit. This limit is based upon the size of the facilities and what is produced at the facilities, as well as the history of emissions from the facilities. Essentially, this limit is the amount of carbon emission credits that a company has available for a given year. Using these credits as an incentive, companies that produce a lower amount of greenhouse gas than their limit may sell their left-over credits to other companies that are going over their own limit. Knowing that money can be made by selling their carbon emission credits to other companies pushes some companies to strive to greatly reduce much of the pollution they produce. Using energy efficient devices, such as using florescent lighting instead of incandescent lighting is one method to lower the amount of credits used. Making use of renewable energy sources, such as solar, wind, and even water power, is a second method. Companies that make use of their land to plant trees can also gain extra credits to sell to other companies. Trees in general absorb much more carbon dioxide than grass and small plants. Therefore, by going green, companies can use the sale of their extra credits to expand the business giving them even more opportunities for growth.

   

Comments

12/15/2008 6:49:32 AM
Stan Walker said:

Who will control the buying/selling rate of carbon credits?




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