Carbon Credits 101
Unless the sea floods your dining room, or the coal-fired power plant next door belches out dirty smoke for you to inhale, it is difficult to appreciate what all the fuss is about regarding Green House Gases (GHG) and global warming. And, what is a carbon credit anyway? Let’s try a simple explanation.
Imagine you boil your jug to make a cup of tea. The energy used to boil the water – in this case electricity – has to be generated somewhere: let’s say in a coal-fired plant. Burning the coal to generate the electricity for your tea creates carbon emissions (dirty smoke), or a carbon deficit.
For arguments sake, let’s say the carbon emitted was 1 tonne. To balance the carbon ledger, these emissions have to be compensated for, or offset, by purchasing a carbon credit of 1 tonne.
How are these carbon credits created? Well, the electricity generator above decides to build a wind farm to mitigate emissions. Now, wind is used to generate electricity instead of coal. The power company applies to an international verifier that agrees – yes, you have reduced carbon emissions because instead of coal, you are now using wind to generate electricity.
The power company is awarded credits for completing this process which they can sell on the open market, making the wind farm project financially viable. Hence, when you buy a carbon credit you are actually helping to pay for projects like wind farms.
Read more on this article. It can be found on Celsias.com
Tags: Carbon Emissions
November 4, 2009 7:53 pm 
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