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Carbon Credit: Concern about climate change and increasing pollution is continuously increasing around the world. In such a situation, to reduce carbon emissions, many countries have adopted systems like carbon credit. Today it is not only a medium for environmental protection but has also become a global business worth billions of dollars. A large number of companies are buying carbon credits to compensate for their country and their carbon emissions. Whereas it is becoming a source of additional income for the countries, institutions and farmers who are reducing pollution. India is also moving rapidly towards developing its carbon market. In such a situation, let us now tell you what carbon credit is and how these countries are earning billions by selling air.
What is carbon credit?
Carbon credit is a kind of certificate. One carbon credit means that emissions of 1 ton of carbon dioxide or its equivalent greenhouse gas have been reduced. If any person, institution or company does work that reduces pollution, then it can get carbon credit. At the same time, companies that emit carbon more than the prescribed limit compensate for their excess emissions by purchasing these credits.
How did carbon credits start?
The concept of carbon credit came into existence after the Kyoto Protocol of 1997. Under this, a target was set to limit the emissions of greenhouse gases. Later, in the Paris Agreement of 2015, countries also committed to reduce emissions to deal with climate change. Under this system, a limit on carbon emissions is set for countries and industries. If an organization emits more than that limit, it has to buy additional carbon credits.
How does the carbon credit business work?
Carbon credits can be bought and sold. This is called carbon trading. Suppose a company is polluting more than the prescribed limit from its factory. In such a situation, he has two options, first, he should reduce his carbon emissions by adopting new technology and second, he should invest in some project which reduces carbon emissions, such as large-scale tree plantation, solar energy, wind energy, bio methane project or in energy technology. Carbon credits are available on the basis of the amount of carbon emissions reduced in such projects. After this they can be sold to needy companies.
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How is the carbon market being created in India?
After the amendment in the Energy Conservation Act 2001, India has taken steps towards developing a domestic carbon market. The aim of the government is to create such a market where carbon credits can be transacted and industries as well as farmers can benefit from it. According to experts, both offset market and emission trading schemes can operate simultaneously in India in the future.
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