Carbon Credits FAQ
Consumers aren't the only ones going green these days. Through the use of carbon credits, businesses all over the world are becoming more environmentally friendly as well. However, few consumers actually understand how the carbon credit system works. Companies who produce a lot of carbon can use these credits to make up for the damage they're doing to the environment. If you want to make the greenest choices as a consumer, learn a little about how the credits system works and which companies are making the most of it.
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What's the Difference between Credits and Offsets?
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As a consumer, you can purchase carbon offsets. Basically, it is a donation you're making to help compensate for your carbon footprint. Carbon credits, however, are a little different, as they are part of a cap and trade program. Cap and trade programs were first used in the United States in the 1990s and are less about "donating," as with carbon offsets and more about observing limitations. The government looks at data from different industries and sets a "cap" (maximum) amount of carbon that each company can release, relative to size. They receive permits for amounts up to this cap, which can be then sold to other companies if carbon emissions are low enough. Alternatively, a company can purchase carbon credits from another greener company if they do not wish in invest in more environmentally friendly equipment and practices.
Can Carbon Credits Really Work?
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Although the jury is still out on carbon credits, cap and trade programs for other emissions have worked well in the past. According to Grist, a popular environmental website, the United States has seen great success with lowering sulfur dioxide emissions, which helped with acid rain problems effectively and efficiently in terms of cost. There has also been a successful cap and trade program among some states that has helped reduce the ground-level ozone. Since the commercial sector causes about 75 percent of all carbon emissions in the United States, carbon credits for businesses likely will cause a reduction in carbon emissions.
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What Are Alternatives to Carbon Credits?
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Not everyone supports a carbon credit cap and trade program. According to a recent article by CommonDreams.org, a carbon tax is another solution to rising emissions that some experts believe is better than carbon credits. With a carbon tax, the government would simply charge a tax on the amount of emissions a company products, rather than forcing a carbon credit market to exist.
Where Do Carbon Credit Systems Exist?
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Countries all over the world are starting carbon credit cap and trade systems. In the United States, a number of states are a part of the Western Climate Initiative, which started in California and now has expanded to Arizona, Montana, New Mexico, Oregon, Utah and Washington. And in Canada, British Columbia, Manitoba, Ontario and Quebec have joined the Western Climate Initiative, according to CommonDreams.org.
What are Countries' Carbon Reduction Goals?
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According Grist, the point of carbon credits is to set the cap low so that companies are forced to lower emissions more and more over time. What are specific countries' carbon reduction goals. The United Nations Framework Convention on Climate Change surveyed a number of countries on their reduction goals for carbon (as well as other greenhouse gases) from 2008 to 2012. The United States hopes to reduce emissions by seven percent, while the European Unions' goal is eight percent. Canada, Hungaray, Japan and Poland have all indicated a six percent reduction goal, and Croatia has set a goal of five percent. Some countries, especially those that rely heavily on coal energy, have indicated that they'd like to see no rise in carbon or a smaller rise than in the past, rather than a reduction.
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