How carbon credits work?
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Carbon credits are a market-based tool designed to reduce greenhouse gas (GHG) emissions. Each credit represents permission to emit one ton of carbon dioxide or its equivalent. The system operates primarily through cap-and-trade frameworks, where governments or international bodies set a cap on total emissions, distributing or auctioning off a corresponding number of credits to companies. Companies that reduce their emissions below their allotted credits can sell their excess to others who exceed their limits, creating a financial incentive for emission reductions.
Additionally, credits can be earned through carbon offset projects, such as renewable energy initiatives, forestry projects, methane capture, and energy efficiency improvements, which remove or prevent GHG emissions from the atmosphere. These projects must be verified and certified by independent organizations to ensure they meet specific standards. Carbon credits operate in both compliance markets, regulated by governments, and voluntary markets, where organizations and individuals offset their emissions independently.
Despite these criticisms, carbon credits remain a pivotal mechanism in global efforts to combat climate change by encouraging reductions in GHG emissions and fostering sustainable practices.
Anke Kirsch
Aug 20, 2018
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replyFalk Burger
Aug 20, 2018
Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium dolor emque laudant tota rem ape riamipsa eaque.
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