Carbon Trading Market – Basics And Trends

Carbon trading emerged as a regulatory mechanism to control CO2 emissions, and it has increasingly caught the attention of governments and industries throughout the globe. Carbon trading involves the selling and purchase of carbon credits, where every single credit allows the emission of one tonne of carbon dioxide and other greenhouse gases to the buyer, and is the key component of the cap-and-trade system in use in several countries which are bound by the Kyoto Protocol.

Global emission allowances have been restricted by the Kyoto protocol, and the caps are distributed as carbon credits to each operator, who gets a certain amount of these credits that can be consumed or transacted in the market. Organizations that feel they may go beyond the emission limits can purchase these credits from low-emission industries that have credits left with them because of adopting eco-friendly methods of doing business. As high-emission companies are made to pay for their act, they are driven to look for greener technologies.

So far market responses on carbon trading have been encouraging, with most large industries throughout the globe opting for this emission-lowering method. This is because such quid pro quo trade makes their near future and medium-term planning more flexible.

If the figures of the World Bank’s Carbon Finance Unit are to be believed, then carbon trading is growing at a great rate with each passing year. The years 2003 and 2004 witnessed a trading growth of 41% in the market, while the growth in the following cycle has been an unprecedented 240%. Growth in the London based carbon finance market has also been very impressive, proving the fact that carbon trading is clearly a profitable business strategy for a number of organizations. Many states and industries in the US have also adopted carbon trading practices, even though the country is not a signatory to the Kyoto Protocol. Additionally, the EU, which has its own carbon trading system, has also been very participative in this global trading market.

However, this trend has not seen a positive response from some parties. The immense increase in the carbon trading business indicates that organizations throughout the world are in fact more willing to purchase carbon credits rather than utilizing low emission energy options which has always been one of the objectives of carbon trading. Hence the efficacy of carbon trading has remained open to speculation, with some environment experts suggesting imposition of carbon tax to be a better substitute for achieving an emission-free environment.

Learn more about Uk marriage visa carbon credits and Uk marriage visa carbon offset and how it can help the environment.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *