Can someone please explain to me the reasoning behind carbon credits?

Question

Ok, so from what I understand, these companies, people, and even gov't entities can buy up these so called carbon credits and somehow offset their carbon emissions and therefore become "green" or "carbon-neutral". It sounds like each credit is equivalent to so-many cubic tons of gas, and you just buy up your share. I frankly dont see how this process could ever hope to work. What body or entity is controlling these credits? There amount and availability? Is there a strict limit to how many the world (or a country) has? And who creates these credits? Anybody that wants to, or that gets "licensed"?

It basically sounds like different companies sell them off and then people, who think they are actually doing something productive, buy them up without actually doing anything at all. Everyone is STILL producing the same amount of carbon and NO ONE, at all, is greener in the process. Am I missing something here?

So basically, and let me stress "in theory", the world will stop producing MORE carbon emissions than were produced at a set date, and people will just buy and sell based on what they need. If that's correct, that is a good theory but will never work because it's nothing but an honor system.

Answer 1

You are mostly correct. Sometimes the carbon credits will be used to invest in green power (solar, wind, e-recovery) technologies or to purchase preservations. It's a bit of a farce b/c these companies are still polluting. I know the company that I work for is getting away from this b/c they realize that it's not a REAL solution. We should invest in green technologies, but we should also look at engineering controls and greener chemicals in our processes to eliminate all the pollution in the first place. Oh, and moving the business to China is not the solution either, b/c then we have serious exploitation issues...uncontrolled pollution, (no enviro laws) human rights violations, and overuse of natural resources!

Answer 2

The basic theory behind them is supply and demand. I never knew that individual people could buy or sell carbon credits (I kind of doubt that is the plan) but everything I've heard about it goes like this: a certain industry or country is alloted so many carbon credits. So if the electric utility industry has so many credits, then each utility should get an equal amount of carbon credits based on how many customers they serve or how many GW of power they produce, something like that. Then if they are able to produce less carbon than what they are allotted, they can sell them to someone who is polluting more. This encourages polluters to become cleaner! It will soon become very uneconomical for a company to keep polluting and will encourage them to invest in alternative energy in order not to have to keep paying these fines.

Also, after a year or a few years, a number of carbon credits in the system should be taken away. This will reduce the supply of carbon credits, and will further drive up the cost of them, making it even more expensive to pollute.

A system like this should work, so long it stays free of abuse and special "favors" for certain companies. I have no doubt, in a free market, something like this would work,I just have doubts about if the politics can stay out of it enough for it to work. I believe it's a good start, though. It's certainly better than signing a treaty that says we're going to reduce our emissions by XX% by the year 20XX, and when that time rolls around and we're still polluting way more than we should, there are no penalties for it.

Bottom line - it's all about the $$. Corporations and the vast majority of people won't change unless it's financially feasible for them to do so. Carbon credits will hopefully make it so people actually want to go green.

Answer 3

In theory it is a way to reward people who emit less CO2 by giving them cash money and funding that by making the people who emit more pay for it. The idea is that the big emitters will be motivated to reduce their emissions. It is basically a motivating factor. But I doubt it can work. Most of the low emitters are low because they are too poor to have cars or whatever. All the credits would do is make the big emitters too poor to have so many cars and allow the low emitters to get rich enough to buy cars. It is like communism, taking from the rich and giving to the poor until everyone has equal income. It would probably not result in new technology being developed to actually reduce world emissions because it will be the rich and technologically advanced countries like the U.S. that can really develop that technology. It will take a lot of money to do, so the last thing you want is to give the money to people who will just use it to increase their emissions. That is EXACTLY what is going on with China. Under the Kyoto protocol China has no emission targets at all, but other countries do and they have to pay cash to China when they miss those targets. Now China is buying cars and building coal fired power plants at such a rate that they recently passed the U.S. to become the number one emitter (as a country, not per capita) of CO2 in the world.

Answer 4

Thank you! i tried to explain how it is a big scam to one of my "friends" but he believes everything he reads. Just because you BUY something that says you are a good person and it "cancels out" you polluting doesn't make you green in any way. this is a horrible scam made for rich people to feel good about themselves and act like they are helping. My friends argument was that Al gore is being green because he buys these carbon credits. What i said was something along the lines of Al gores house pollutes more than the white house (according to some source that i have forgotten and is probably inaccurate). I'm not sure i believe this but on the other hand i know his house is not by any means Eco friendly. He claimed that by buying these credits that cancels out the fact that his house pollutes. and in my own head i was thinking "well, there is still pollution going on, so how do the credits help? they don't!" it makes no sense and the Gov't is just trying to make an easy buck.

Answer 5

Star for you! You got it exactly correct! Carbon credits are a huge scam. It's a way for companies and the Government to make money.

People, and companies need to actually clean up their act, not just buy mythical carbon credits. Carbon credits are not making a bit of difference in the world in the long run.

My husband works in the commercial wind turbine industry. Of course we cannot control whether or not the company he works for sells carbon credits. He works in that industry, because we have a true love and desire to live more earth friendly lives.

It also makes us very, very angry. We are peopl who really DO live green, earth friendly lives. Should I be selling carbon credits because our farm is earth friendly and does not pollute? Honestly tempting to take the money of some of these jerks. However I want them to ACTUALLY clean up their act.

I'd be living like this no matter what. Just because I live in an earth friendly manner, does not give them the right to spew out pollutants I'm NOT creating.

I perdict some people are going to make a lot of money selling carbon credits. I think a lot of it's going to be done via some really slimmy deals.

Carbon credits are the biggest joke ever. Whoever came up with that idea should be drawn and quartered.

~Garnet
Homesteading/Farming over 20 years

Answer 6

YES

Al owns the company that he is investing HIS carbon credits in

S C A M (but we're giving him the Nobel prize!)

you can fool most of the people some of the time~!