What are Carbon Credits & How do they Work?

-What are Carbon Credits?

Carbon credits are part of the economics of global warming. Credits are given to companies that have a surplus of emission allowance. Emissions are bi-products released into the atmosphere as a result of the breaking down of fossil fuels. Emissions include carbon dioxide, methane, nitrous oxide, hydroflorocarbons and sulfur. These items add to the Earth's ability to trap infrared energies in the atmosphere.

Carbon credits emerged as a commodity from the Kyoto Protocal, which was a multi-national agreement formulated by more than 170 countries. Credits allow corporations - especially those that operate factories that rely on the consumption of fossil fuels - the chance to duck regulations concerning the amount of permissible emissions.

-How do Carbon Credits work?

Essentially, factories are allocated a number of permissible emissions. These emissions are calculated in tonnes. The factory will offset their emissions by purchasing carbon credits from another factory or company that has a surplus of emissions.

At best, this looks to be a form of baby-stepping the factories to responsible action. The thing I wonder about this is whether when the COP15 meets if these permissible amounts of carbon will be more tightly restricted?

... stay tuned, we'll keep looking into it.

The purchase of carbon credits can help create new environmental initiatives. Check out this article from valuable blog source, TreeHugger: Survey of Carbon Offset Services.

Both people and companies are purchasing carbon credits, is it for you?