What Is the Origin of Carbon Credits?
Carbon credits are a way of turning carbon emissions into a tradeable commodity. In recent years, the idea of issuing a certain number of carbon credits to large polluters and then allowing them to trade those credits has been seen as a viable way to lower greenhouse gas emissions.
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Beginnings
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The first emissions trading scenarios were run in 1960 by the US National Air Pollution Control Administration. They demonstrated the success of what they called a "least cost" solution to air pollution problems.
Role of IPCC
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Since its creation in 1988, the Intergovernmental Panel on Climate Change (IPCC) has been the authority on all things carbon. When the IPCC reported that treating carbon as a commodity would be effective, the idea of carbon credits was brought to the public.
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Time Frame
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The idea of emissions trading with carbon credits relies heavily on the ability of polluters to reduce slowly but surely their emissions each year.
Carbon Credits in the European Union
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Since 2005, the EU has been operating a carbon credit trading system. As of 2008, the program was working with limited success in lowering emissions; each year fewer credits are available, suggesting that the program is likely to be successful.
Carbon Credits in the United States
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Starting in 2009, many New England states are planning to participate in a regional carbon credit emissions trading program that will reduce emissions in the region.
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