The Kyoto Protocol specifically states that nations conforming to its terms must take a major initiative in reducing emissions of greenhouse gases. Carbon trading and carbon offset were the two main methods proposed to attain this objective.
Certain financial instruments called carbon credits are sold and bought in markets across the world in the carbon trading method. One ton of carbon dioxide or a similar amount of other greenhouse gases can be discharged into the atmosphere by an individual who buys a unit of carbon credit. The menace of global warming can be effectively dealt with by this method which has many benefits.
The underlying benefit of using carbon credits is that it restricts the overall global greenhouse emissions. Companies that pollute the environment are penalized to do so and those who do not are incentivized. Thus, the entire system motivates companies and states to promote environment friendly procedures that lower greenhouse gas emission.
An international market for carbon credits makes sure that firms can adopt and practise this system without difficulty. There are no complex rules or procedures to go through, which increases their popularity and makes the system highly effective.
Another advantage of carbon credits is that they not only penalize companies with uncontrolled emissions, but also incentivize firms with more eco-friendly processes. This implies that companies releasing greenhouse gases within prescribed limits will be encouraged to outperform themselves in lowering of emissions so that they can profit by the trading of carbon credits in the global market. Thus, the environment is steadily made pollution-free by this system.
Most countries across the world have espoused and embraced the system of carbon credits trading, and this is perhaps its most important advantage. Inability to generate considerable support and acceptance result in the failure of several projects. As carbon credits have received worldwide acceptance, they can go a long way to make sure that our environment is made pollution free.
Certain financial instruments called carbon credits are sold and bought in markets across the world in the carbon trading method. One ton of carbon dioxide or a similar amount of other greenhouse gases can be discharged into the atmosphere by an individual who buys a unit of carbon credit. The menace of global warming can be effectively dealt with by this method which has many benefits.
The underlying benefit of using carbon credits is that it restricts the overall global greenhouse emissions. Companies that pollute the environment are penalized to do so and those who do not are incentivized. Thus, the entire system motivates companies and states to promote environment friendly procedures that lower greenhouse gas emission.
An international market for carbon credits makes sure that firms can adopt and practise this system without difficulty. There are no complex rules or procedures to go through, which increases their popularity and makes the system highly effective.
Another advantage of carbon credits is that they not only penalize companies with uncontrolled emissions, but also incentivize firms with more eco-friendly processes. This implies that companies releasing greenhouse gases within prescribed limits will be encouraged to outperform themselves in lowering of emissions so that they can profit by the trading of carbon credits in the global market. Thus, the environment is steadily made pollution-free by this system.
Most countries across the world have espoused and embraced the system of carbon credits trading, and this is perhaps its most important advantage. Inability to generate considerable support and acceptance result in the failure of several projects. As carbon credits have received worldwide acceptance, they can go a long way to make sure that our environment is made pollution free.
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