Carbon credits are tradable permits or certificates that give the holder a right to emit a tone of carbondioxed in the atmosphere. The credits are awarded to groups or countries that have successfully reduced their greenhouse gases below a certain emission quota. These credits are traded on the international market.

The system of carbon credit came into existence in the 20^th Century after people realised that human and industrial activities are the main causes of environmental degradation and global warming. Carbon credit system places some costs on the carbon emitted into the atmosphere and which is valued against a ton of hydrocarbon fuel. The credits permit the receiver to burn a specified amount of hydrocarbon fuel for a specified period of time. The credits are granted to companies or to groups of people who take action to reduce carbon emission 

Companies Buying
There are many companies and organizations that purchase carbon. Such companies offer lower price per tonne. Purchasers have the discretion of choosing the specific project they want to

Features of Carbon Credits

Carbon credits ware introduced so as to help sustain life and rescue the environment by reducing carbon emissions. Here is a list of features:

Benefits to individuals- when they trade carbon credits individuals earn a livelihood and at the same time reduce the amount of carbon emitted in the air.

Buying greenhouse gasses- each of the carbon credit purchased is channelled to a company that is tasked with the responsibility of bringing down the emissions and provide a more sustainable and environmentally friendly alternatives to the emitters.

Business and job opportunities – Just like any other business, trading in carbon credit using the capitalist principle allows investors to make profits and create businesses that are environmentally sustainable. This adds more jobs on the job

Kyoto Protocol

The whole idea of treading in carbon was signed and sealed at some gathering of nations many years ago. This is what is referred to as Kyoto

How Carbon Credits Work

Carbon credits are measured in tones of CO2 bought and sold through international traders online. If a business finds it difficult to comply with carbon emissions, they purchase the credits and thus avail finances, which are used to finance renewable energy projects. The funds are also used to protect the forest and finance reforestation projects across the globe.  These renewable energy is then used to replace the fossil fuel and reduce industrial processes. It helps to comply with global standards and reduce emissions.

Projects that sell carbon credits include solar, wind, geothermal, biomass projects, those that protect forests from illegal logging, projects that destroy heat trapping greenhouse gases, afforestation projects, fight illegal logging and many more.

Unfortunately, carbon credits have not worked as envisioned. There are a number of firms that do not conform to Kyoto protocol and have not reduced the emissions or traded in emission

Terms

Carbon Offsets – it refers to reversing the damage cause by emitting carbon in the atmosphere

Investments– it encourages people to invest in projects designed to reduce greenhouse gases or carbon dioxide.

Damage Control – It is a description given to carbon offsets, it refers to a form of damage control in which guilty parties give out compensations by buying carbon offsets. While at the same time help to control harmful gasses.

Vintage year- it is the year in which actual reduction of carbon emissions occurs

The source Project – it where technology is devised to offset carbons, methane and biomass.

Certification – it is where checks and balances are put in place to ensure that only authentic procedures and methodologies are followed during carbon offsetting.