Emissions Trading
Emissions trading (also known as cap and trade) are a market-based approach used to control pollution by providing financial incentives for achieving reductions in the emissions of pollutants.
For the last 50 years, scientists have been issuing dire warnings about climate change and the havoc it would soon bring to the world. But for most of us, global warming has long remained, as Business Week puts it, “merely a matter of numbers from a computer model”. As a result, we have taken little notice. That’s changed.
Today, it seems as though we can see global warming all around us. The five months from May to September 2009 were the hottest in the UK since records began and July was the warmest month ever. In the South Pacific, the president of Kiribati, which is just 6ft above sea level, believes his nation may be submerged within a decade.
In an attempt to control and reduce carbon emissions and greenhouse gases, the Kyoto Protocol was created as a way of monterazing carbon output emissions. By making emissions an asset which can be bought and sold, industry and individuals began to take notice. The carbon credit market is now worth approximately US$144 billion as of 2009.
Each carbon credit is worth one tonne of CO2.Companies and individuals can offset their CO2 emissions by purchasing these credits from companies and individuals who are actively reducing CO2 in the atmosphere, therefore making their activities carbon neutral.
For example, a company who is using 1,000 tons of CO2 a year in their factory may purchase 1,000 credits from a company who has started a new biofuel plant which has been verified as taking 1,000 tons of CO2 out of the atmosphere.
360investgroup sources these projects, and trades the credits in the global marketplace.
