| Carbon credits are an element used to aid in | | | | Although the process that must be followed is |
| regulation of the amount of gases that are being | | | | somewhat complex, essentially what happens is that |
| released into the air. This is part of a larger | | | | carbon offsetters will buy the available credits from |
| international plan which has been created in an effort | | | | an investment fund or from a company that |
| to reduce global warming and its effects. | | | | specializes in carbon development and has combined |
| The plan works by capping the amount of total | | | | all of the credits obtained from a number of individual |
| emissions that can be released by one company or | | | | projects. |
| business. If there is a shortfall in the amount of gases | | | | Carbon projects may focus on such areas as |
| that are used, there is a monetary value assigned to | | | | reforestation, fuel-switching, carbon capture and |
| this shortfall and it may be traded. These credits are | | | | storage, and energy efficiency. Many major examples |
| often traded between businesses. However, they | | | | deal with renewable energy options. For instance, |
| also are bought and sold in international markets at | | | | focus may be placed on creating and advancing wind |
| whatever the determined market value for them is. | | | | turbines for wind power, or working with biomass for |
| There are also times when these credits are used to | | | | the creation of biofuels. Solar panels, solar lighting, and |
| fund carbon reduction plans between trading partners. | | | | solar heating are also important alternative energy |
| As previously stated, the central idea is that using | | | | areas. |
| these credits will eventually mitigate the effects of | | | | In many ways, the actual quality level of these |
| global warming. Some detractors claim, however, that | | | | credits is based in large part on the validation process |
| the plan does more to make money for its | | | | of the fund development group that is sponsoring |
| developers than it does to save the earth from itself. | | | | the project. A certain level of trust must be placed in |
| Most countries of the world participate in the credit | | | | these companies that they are managing the credits |
| program. The main formal mechanism is part of what | | | | in the proper manner. |
| is called the Kyoto Protocol. The goal of the group is | | | | The main reason why this whole project has come |
| to meet emission reduction targets. Over 170 | | | | about is because of the burning of fossil fuels by |
| countries make up part of this agreement. | | | | industries across the globe. Proponents to the |
| The United States has signed the protocol but not | | | | program claim that using carbon credits will make |
| ratified it. This is not due to disagreement with its | | | | companies more responsible and will even make |
| principles. Instead, concern has primarily been | | | | some companies more money if they manage the |
| expressed over specific exemptions it holds as well | | | | credits properly. |
| as on the effect it would have on the U.S. economy. | | | | Because the program is relatively new, it is difficult to |
| There are a number of countries that work with | | | | assess how the issuance of credits is being received |
| people who are interested in decreasing the size of | | | | and observed. The first international treaty was |
| their carbon footprint in an effort to help save the | | | | produced in 1992, negotiated in 1997, and signed |
| environment. These people are not mandated to use | | | | between 1998 and 1999. It was not put into force |
| carbon credits, but they are adamant about using | | | | until 2005. Upcoming years will demonstrate its |
| them in the right way. Many companies will sell the | | | | efficacy and determine any necessary future |
| credits to such individuals who want to try to make a | | | | adjustments. |
| difference. | | | | |