"Carbon Credit: Trading With Nature"

Climate change stem from increasing greenhouse gases such as carbon dioxide are the result of emissions from fossil fuel combustion, tropical land clearing and natural process. To offset those gases, CO2 emissions are being limited through engineering controls or storing carbon through biological controls. The concept of carbon credits came into existence as a result of increasing awareness of the need for controlling emission and formed under the “Kyoto Protocol” is an international agreement linked to the UNFCCC. To make the “Kyoto Protocol” more effective, the concept of Carbon Credits was introduced. Carbon Credit is like a Permit that allows an entity to emit a specified amount of greenhouse gases. One credit is equal to 1 tonne of CO2 reduced. It introduces a new form of commerce: the carbon trade is a new economic activity involves the buying and selling of “environmental services” including the removal of greenhouse gases from the atmosphere. Carbon credits are currently trading for $9.5 to $10 per metric ton. There are six exchanges trading in carbon allowances. JI and CDM are the two project-based mechanisms which feed the carbon market. Currently there are about 227 upcoming manufacturing/public utility projects in India whereas the global requirement is 350-500 million tons of additional carbon credits. Countries not only invest in new technologies & heavy machinery in order to reduce their emissions but they can just pay a minimal amount & get a carbon emission certificate for their emissions.