The Flourishing Carbon Trading Market
Carbon trading came forth as a regulatory mechanism to check CO2 emissions, and it has increasingly caught the attention of governments and organizations across the world. Carbon trading involves the selling and purchase of carbon credits, where every single credit permits the emission of one thousand kilos of carbon dioxide and other greenhouse gases to the purchaser, and is the primary component of the cap-and-trade system implemented in several countries which adhere to the Kyoto Protocol.
According to the Kyoto protocol, a limit has been fixed on global emission allowances, which are then apportioned into carbon credits, a certain number of which are granted to each operator. Operators with greener technology often do not consume all of their credits, and as a result, can sell these to those who foresee that they will be going beyond their allowances. High-emission operators are discouraged for their high emissions by this penalty for polluting the environment.
Market trends in carbon trading suggest that it has turned into the greenhouse gases emission-lowering method of choice for a lot of big corporations throughout the globe. This is because such quid pro quo trade makes their short-term and medium-term planning more flexible.
Carbon trading is rising exponentially each year, according to the statistics reported by the World Bank's Carbon Finance Unit. There has been a great increase from 41% to 240% in the carbon trading market between the years 2003 and 2005. The carbon finance market, based in London, has also seen stupendous growth, which clearly indicates that the exchange of carbon credits has turned out to be a profitable business for many organizations. Despite being out of the Kyoto Protocol list of countries, several states and industries in the US have welcomed the carbon credits scheme and have incorporated it in their business. The EU too, with its own carbon trading system, has been actively involved in carbon trading for a few years now.
However, there are certain groups who have criticised this policy. Carbon trading is actually aimed at making high-emission companies invest in greener technologies and thereby promoting development of low emission energy alternatives, which is not happening because defaulting organisations seem to be more interested in buying carbon credits rather than opting for eco-friendly technologies. Hence some groups are apprehensive of the long-term advantages of carbon trading, and some experts have opined the levying of carbon tax to be paid by errant organizations as a more appropriate solution to greenhouse gas emissions. - 21392
According to the Kyoto protocol, a limit has been fixed on global emission allowances, which are then apportioned into carbon credits, a certain number of which are granted to each operator. Operators with greener technology often do not consume all of their credits, and as a result, can sell these to those who foresee that they will be going beyond their allowances. High-emission operators are discouraged for their high emissions by this penalty for polluting the environment.
Market trends in carbon trading suggest that it has turned into the greenhouse gases emission-lowering method of choice for a lot of big corporations throughout the globe. This is because such quid pro quo trade makes their short-term and medium-term planning more flexible.
Carbon trading is rising exponentially each year, according to the statistics reported by the World Bank's Carbon Finance Unit. There has been a great increase from 41% to 240% in the carbon trading market between the years 2003 and 2005. The carbon finance market, based in London, has also seen stupendous growth, which clearly indicates that the exchange of carbon credits has turned out to be a profitable business for many organizations. Despite being out of the Kyoto Protocol list of countries, several states and industries in the US have welcomed the carbon credits scheme and have incorporated it in their business. The EU too, with its own carbon trading system, has been actively involved in carbon trading for a few years now.
However, there are certain groups who have criticised this policy. Carbon trading is actually aimed at making high-emission companies invest in greener technologies and thereby promoting development of low emission energy alternatives, which is not happening because defaulting organisations seem to be more interested in buying carbon credits rather than opting for eco-friendly technologies. Hence some groups are apprehensive of the long-term advantages of carbon trading, and some experts have opined the levying of carbon tax to be paid by errant organizations as a more appropriate solution to greenhouse gas emissions. - 21392
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