Market Trends In Carbon Emissions Trading
Carbon trading was born out of the need to decrease greenhouse gas emissions, and has become increasingly popular across the globe in recent years. Carbon trading is essentially a trade in carbon credits in which each credit certifies the owner to discharge one tonne of carbon dioxide and other greenhouse gases into the air, and it is the fundamental trading principle governing the cap-and-trade system as formulated in the Kyoto Protocol.
Global emission allotments have been capped by the Kyoto protocol, and the caps are distributed as carbon credits to each operator, who receives a certain amount of these credits that can be consumed or transacted in the market. Organizations that have a stock of credits due to their adherence to greener alternatives can sell credits to organizations that will fall into the high-emission segment for going above their authorized limits. As high-emission companies are forced to compensate for their act, they are driven to look for greener technologies.
Market trends in carbon trading suggest that it has turned into the greenhouse gases emission-lowering mechanism of choice for a lot of big corporations across the world. This is because carbon trading allows them flexibility in their short-term and medium-term planning.
Carbon trading is rising exponentially each year, according to the statistics reported by the World Bank's Carbon Finance Unit. There was a 41% growth in the market between 2003 and 2004, and a huge 240% rise between 2004 and 2005. The carbon finance market, based in London, has also seen immense growth, which clearly suggests that the exchange of carbon credits has turned out to be a profitable business for many organizations. Despite being outside the Kyoto Protocol list of nations, many states and industries in the US have approved of the carbon credits scheme and have adopted it in their business. The EU too, with its own carbon trading system, has been actively engaged in carbon trading for a few years now.
However, some sections of people are not convinced about the effectiveness of carbon trading. Carbon trading is in fact aimed at making high-emission organizations invest in more eco-friendly technologies and thereby encouraging development of low emission energy substitutes, which is not happening because errant organisations seem to be more interested in buying carbon credits instead of choosing eco-friendly technologies. Hence, carbon trading has been a topic of discussion in several parts of the world, and some specialists are of the opinion that alternatives like taxation on extra carbon emissions is the better way to control the greenhouse gas emissions. - 21396
Global emission allotments have been capped by the Kyoto protocol, and the caps are distributed as carbon credits to each operator, who receives a certain amount of these credits that can be consumed or transacted in the market. Organizations that have a stock of credits due to their adherence to greener alternatives can sell credits to organizations that will fall into the high-emission segment for going above their authorized limits. As high-emission companies are forced to compensate for their act, they are driven to look for greener technologies.
Market trends in carbon trading suggest that it has turned into the greenhouse gases emission-lowering mechanism of choice for a lot of big corporations across the world. This is because carbon trading allows them flexibility in their short-term and medium-term planning.
Carbon trading is rising exponentially each year, according to the statistics reported by the World Bank's Carbon Finance Unit. There was a 41% growth in the market between 2003 and 2004, and a huge 240% rise between 2004 and 2005. The carbon finance market, based in London, has also seen immense growth, which clearly suggests that the exchange of carbon credits has turned out to be a profitable business for many organizations. Despite being outside the Kyoto Protocol list of nations, many states and industries in the US have approved of the carbon credits scheme and have adopted it in their business. The EU too, with its own carbon trading system, has been actively engaged in carbon trading for a few years now.
However, some sections of people are not convinced about the effectiveness of carbon trading. Carbon trading is in fact aimed at making high-emission organizations invest in more eco-friendly technologies and thereby encouraging development of low emission energy substitutes, which is not happening because errant organisations seem to be more interested in buying carbon credits instead of choosing eco-friendly technologies. Hence, carbon trading has been a topic of discussion in several parts of the world, and some specialists are of the opinion that alternatives like taxation on extra carbon emissions is the better way to control the greenhouse gas emissions. - 21396
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