Carbon credits

  • Hello everyone, todays topic on talkback thursday is carbon trading or carbon credits.

Today’s topic urges us human to stop thinking of our development and benefits for a while and think about the environment that is perishing because of our selfish deeds.

What is carbon credits??
It is a generic term for a permit that allows a country to emit one tonne of carbon dioxide or any greenhouse gas equivalent to one tonne of carbon dioxide per year.

It is a step taken by many countries to mitigate the concentration of carbon in the atmosphere. In carbon trading the carbon emitted is capped and the markets are used to allocate the emission among the buyers.


  • Objective
    It allows market mechanism to drive industrial process towards the direction of low emission of carbon dioxide which was not possible when there was no money chargeg on emission of greenhouse gases. The greenhouse gases projects generate credits , these credits are used to finance carbon reduction scheme internationally.

Pros of carbon trading

  1. Its an investment in alternative fules.
    Many companies are finding alternative fuels that will reduce carbon emission. The carbon credits are used to finance such credits. These funds allow them to continue search for alternative fuels which will make them more affordable when they are available.

      2. It can change a country’s financial status.

If a underdevelopd country takes up a project that produces less carbon emission to offset a project taken by a developed country that produces too many emission , the underdeveloped country can be largely conpensated. If a country uses methods like tree plantation that continues to be an offset a lot of profit can be generated that can change a country’s financial status drastically.

Lastly i would like to add if there are any points that needs to be discusses or added please let me know.

Source-www.investopedia.com and wikipedia
Drafted by Sneha Gaikar

  • The KYOTO PROTOCOL was the protocol that invented the concept of carbon credits.



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