Carbon Offset Credits
A carbon offset can be described as one metric ton of carbon dioxide’s equivalent greenhouse gas or gases. A single carbon offset is one thousand kilos of carbon dioxide or a combination of its equivalent polluting gases being removed from the atmosphere. A carbon offset is written as CO2e. Greenhouse gases are categorized into six primary categories.
Two markets to trade carbon offset credits
Carbon offset credits have two main markets that they are traded in. One is a very large compliance market where in entire countries, industries and other polluting entities buy carbon offset credits to comply with the caps implemented on them on the amount of carbon dioxide they can emit in a year. The year 2006 witnessed approximately 5 and a half billion US dollars worth of carbon offset credits being bought by this large compliance market. This amounted to 1.6 billion tons of Carbon offset gases being removed from the air.
Carbon offsets can only be accumulated by people, industries, and organizations working hard to remove carbon offsets from the air. By making it mandatory for polluting entities to buy carbon offset credits from these organizations industries are actually paying them to remove the carbon offset gases that they are belching into the air. So, if 1.6 billion tons of carbon offset credits are being bought from the market it means that 1.6 billion tons of carbon offset credits were either prevented from being created or that it was removed from the air.
The second market comprises the common man
The second market for carbon offset credits is the smaller and voluntary market, In this market smaller entities such as transportation businesses, individuals, and companies buy carbon offset credits with the aim to reduce the liability of their own greenhouse gas emission. This emission could possibly be from any source such as the use of an electrical appliance like a refrigerator, air-conditioner, or other electrical source.
Corporate houses will be liable to purchase carbon offset credits if their executives exceed the carbon offset credits emission they are allowed in one calendar year. They can contribute pollutants through car or private air travel. For example each individual may be permitted say 100 thousand carbon offset credits for a year. Now a common man might not need that many credits and will realize in the end of the year that he still has a few dozen carbon offset credits left from his quota of 100,000 carbon offset credits.
Now compare him to the jet-setting business executive who has been alloted the same amount of carbon offset credits. This individual is definitely going to exceed his quota of credits and will be in the market looking for carbon offset credits to buy because this is mandatory by law. One of the people he will be buying carbon offset credits from will be the former common man with credits to spare.
Again statistics from 2006 show that about 24 million tons of carbon offset credits were bought in this microscopic voluntary market. This quantity of carbon offset credits amounted to 91 million US dollars of carbon offset credits.
A more effective way of forcing polluting entities to pay for the pollutants they add to the air and at the same time reward the people, organizations and countries helping to clean the air is yet to be developed nor has a faster and easier way for every individual to earn money through his or her efforts to clean up the air we breathe been invented.
Tags: buy, buy credits, carbon, carbon credits, carbon dioxide, carbon market, carbon offset, carbon offset credits, carbon offsets, emissions, polluting, quota
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