Carbon Credits-Reducing Emission of CO2

The Back ground

Global warming is a cause of concern worldwide and it can be attributed to the fact that with every passing day, the ozone layer is getting depleted like never before. With rapid industrialization, the emission of carbon dioxide has increased manifold. There are other gases too but the concentration of CO2 is more. Since economies around the world have expressed concern over the changing climatic conditions and the consequent harmful effects on the ecology as a whole, some of the countries entered into an agreement to reduce carbon dioxide emissions.

To work out a solution the countries that emitted maximum carbon dioxide were identified. At a meeting held at Kyoto, the countries were given targets to minimize emission of carbon dioxide. Since China and India were not included in the Kyoto Protocol, United States chose to stay away from the Kyoto Agreement.

How can carbon credits help in reducing CO2 emission?

It was decided at the Kyoto meeting that every country that produces carbon dioxide should plant trees to absorb the gas. If any nation produces more carbon dioxide than its absorption capacity, it has to buy carbon credits. Carbon credit is a new currency and 1 ton of carbon dioxide is equal to 1 carbon credit (CO2e or carbon dioxide equivalent). A country can fall short of absorbing about 500,000 tonnes of CO2. Under such circumstances, the country has to buy carbon credits from other nations which have planted more number of trees. The approximate costs of carbon credits range between USD$10 and USD$40 for every credit.

If not by planting trees, a nation could adopt other methods too to reduce carbon dioxide emission. For instance, farming techniques could be altered to make it more eco friendly, thereby increasing the absorption of carbon dioxide from the atmosphere.

How to use the proceeds from carbon credits?

The money that is obtained by selling carbon credit can be further used for other carbon dioxide reduction schemes. For instance, New Zealand has used the fund for its wind generation projects.

If carbon dioxide emissions can be reduced effectively, economies around the globe will be benefited greatly. It will help economies to grow not only economically but also ecologically by maintaining the equilibrium.