Carbon credit

Carbon credit is a term used for a tradable certificate or we can say a permit which represent the right to emit one tonne of carbon dioxide (CO2) or equivalent amount of other green house gas.

Carbon markets and carbon credits are things related to national and international level efforts to control/reduce/mitigate the growth in concentration of green house gases.

 

carbon credit, carbon trading

Carbon trading : To the point

Which companies, that pollute environment, are awarded with credits which will allow them to continue to pollute up to a certain given limit. In the period of time, this limit is reduced, that company may sell there unneeded carbon credits to another company that needs them.

So, companies thus doubly incentivized to reduce harmful greenhouse gases emissions. They will get fined if they exceed the limit and they can also make money by saving there carbon credit and then reselling it to others.

This is called carbon trade, and which is originated in 1997, Kyoto Protocol with the objective of reducing carbon emissions and dealing with climate chang and global warmings.

UNFCCC (United Nations Framework Convention on Climate Change), COP 25 which is held in medrid, Spain, describes rules for a carbon market under the paris agreement.

We know that Kyoto protocol and peris agreement are both connected to UNFCCC.

 

UPSC Prelims 2011 Question:

Regarding "carbon credits", which one of the following statements is not correct ?

(a) the carbon credit system was ratified in conjunction with the kyoto protocol

(b) carbon credits are awarded to countries or groups that have reduced greenhouse gases below their emission quota

(c) the goal of the carbon credit is to limit the increase of carbon dioxide emission

(d) carbon credits are traded at a price fixed from time to time by the united nations environment programme

 

 Answer:  (d)

 

 

Do you Know the Difference Between Kyoto protocol and peris agreement ? if not, then identify them for conceptual clarity.