Did you know companies can help fight Climate Change and Earn Money? Understanding Carbon credits and its working for Industries

Carbon credits are a way to decrease the carbon emissions and hence the carbon footprint.

1 Carbon Credit = 1 ton of CO2 ( or other Green House Gases).

A market for trading these credits is called the Carbon Credits Market.

There are 2 types of Carbon Markets :

1 – CAP and TRADE – Mandatory Program: The Government sets a target cap for the amount of CO2 based on the industry type. If a company emits more than their cap of CO2e, they have to buy credits equivalent to the excess emissions and if they emit lesser, they can trade or sell the excess credits to other companies. This means that the company can make money if their processes are emitting lesser CO2eand on the contrary a company would need to spend money if their emissions are higher.

2 – Voluntary Offset Program: This program is for Nonprofit organisations, businesses and even individuals to lower or offset their emissions voluntarily. Businesses / Individuals can create and sell carbon credits by reducing, capturing and storing emissions through various activities. Eg: Invest in renewable energy, Improve Energy efficiency, Carbon and Methane capture, Land reforestation, Returning Biomass to the soil, Switching to bio fuels