A General Intro To Carbon Credits

Carbon credits can be sold for as much as any SUV-driving, gas-guzzling citizen with a desire to green their life is willing to pay. Since carbon trading is a relatively new phenomenon, there is no standard in place to prevent people from getting ripped off. Carbon credits have provided many people with a previously unavailable revenue stream. But that stream will pick up as the market develops. Carbon credits are essentially commodities. Trading takes place on the Chicago Climate Exchange, which employs brokers known as carbon aggregators.

Carbon credits range from tree planting (trees absorb or breathe carbon dioxide). Many sites will calculate your personal carbon emissions based on where you live, how much your drive, where you get your power, and so on, and then determine how many units you need to buy to become carbon neutral. Carbon credits are also traded in European commodities markets. The reason for the success of the carbon credit business in India is that it is cheaper to buy credits from India than Europe. Carbon credits can be traded in the international market at their current market price.

Carbon credits are merely a diversion from the reality that faces us. They create a market in pollution as a brokered commodity. Carbon credits create a market for reducing greenhouse gas emissions by giving a monetary value to the cost of polluting the air. Set out in the Kyoto protocol, emissions have become an internal cost of doing business and are visible on the balance sheet alongside raw materials and other liabilities or assets. Carbon credits are only vehicles for trading on the broken window fallacy. By being forced to divert capital into carbon credit markets, companies have even fewer resources and capital to commit to research and development of technologies of their own making.