11/18/2023 0 Comments Who issues carbon creditsUnder the clean development mechanism a developed country or an interested operator can fund an emission control venture and hence gets the credits. Under the joint implementation mechanism, first world countries or operators in that country who may not want to incur the domestic costs of emissions control can establish projects in foreign nations in order to be awarded emission credit. ![]() These mechanisms include: Emissions Trading, the Clean Development Mechanism and the Joint Implementation mechanism. To be involved in the mechanisms countries must meet following rations: must be ratified under the Kyoto protocol, must calculate their assigned amounts in terms of tons of CO2 or its equivalent ,there must be a national system and registry for governing emissions and keep records, and they must file an annual report on the control of emissions. It enables sustainable development through technology transfer and investment and also motivates the private investors to put in to the management of emissions. Kyoto mechanisms under the protocol are meant to lower the costs of achieving emission reduction targets and presents a cost effective method of controlling carbon emissions in other countries especially developing countries. However, if a cement factory, for instance, emits 20 tons of emissions annually and has predicted that it is likely to surpass its quota by one ton (5 tons total), it can obtain an emissions credit from the prior firm to cover for the increase.Ĭost-effective methods of emissions control are achieved through the sale of allowances and the organizations can involve themselves in more environmentally secure activities or even invest in buying more credits. ![]() “The eventual trade in carbon credits is treated as emission offset, thus a rise in toxin release by the various firms can be set-off by the decrease from other firms.įor example, if a manufacturing firm releases 80 tons of carbon pollutants per year, but during the year it reduces its releases to 60 tons, the firm is granted 20 emission-allowance credits for cutting its general sum.” 2“Operators that have not used up their quotas can sell their unused allowances as carbon credits, while businesses that are about to exceed their quotas can buy the extra allowances as credits, privately or on the open market”.Ī credit is given to a company, organization or operator when it reduces its emissions of greenhouse gases beyond the set limit, or quota, by one metric ton. The units are controlled and sold by an organization or private operators from which businesses can buy them. Countries are assigned amount units of which each represents an allowance to emit one metric ton of carbon dioxide or other equivalent greenhouse gas and they are recorded in the national registry. The accord is an environmental treaty passed by 170 countries in 1992 by the UN. However, it formally took effect on 16 th February 2001. The Kyoto Protocol was formed in Kyoto, Japan, on 11 December 1997 and in 2001 its rules of operation were set in Marrakesh and came to be known as the “Marrakesh Accords.” The emissions allowance or credits were introduced through the Kyoto protocol which sets limits or quotas on the amount of green houses gas that a country can emit. However, there need to be a central organ that restricts the maximum level of noxious waste that can be released.Ĭompanies who emit more are required to buy credits from those who emit a less from the set value. ![]() They say that, 1“Policies that provide a real or implicit price of carbon could create incentives for producers and consumers to significantly invest in low-GHG products, technologies and processes.” Emission allowancesĮmissions trading, which is also known as cap and trade, is a market-based method used to manage greenhouse gases by creating monetary incentives for achieving reductions. The Intergovernmental Panel on Climate Change is an organization that was created to control industrial emissions, and it came up with the tradable permit system of carbons which they considered to be environmentally effective, as long as there were clear allocation mechanisms and a long term prices set. Some of these gases include carbon dioxide, methane, nitrous oxide, and other hydro fluorocarbons. ![]() Greenhouse gases affect the ability of the atmosphere to trap heat making it absorb more heat, hence global warming occurs.
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