Carbon Trading

Carbon, its a burning issue in various part of the world. We all are absolutely dependent on carbon from very essential purpose to secondary purposes. Mainly Carbon is emitted from the burning of fossil fuels in the industries, vehicles etc. Being a carboneous substances in the nature is not a pollution, but the Carbon emission in immense amount is creating a serious problem all over the world. We all are familiar about the evolution of carbon is from Automobiles, Coal burning specially from industries as well as train. Everyone have special role in this process, we emit carbon from small to high class movement such as burning woods, burning fossil fuels, riding two-four wheeler. The earth and its members are facing global warming and it leads to climate change. The irregular pattern of climate hampers in the socio-economic field all over the globe as well as human health, lifestyle and healthy ecosystem.
Nowadays the burning issue in this contemporary world is climate change and it is main caused by carbon emission. Government is playing their steps to reduce carbon emitting process through various techniques and tools, Carbon trading is one of the best techniques among them.

The process of buying and selling permits and credits that allow the permit holder to emit carbon dioxide is known as carbon trading.

 

 

Fig:Carbon Trading

Suppose, There are 3 biggest industries (A, B &C) in the country. The government noted some limit (as a guideline) to the industries to emit carbon. If the limitation is 1000 units and A emits 800, B emits 1200 and C emits exact the limitation i.e. 1000. Then In this case B will buy 200 units of permit from A to be in the limit value of guideline. This overall selling and buying process of A and B is known as Carbon Trading. A had 200 units remained unused is called carbon credit. The industry C don't have to buy or sell because it doesnot permit to emit more than 1000 units. 

Carbon Trading is a concept adopted in kyoto protocol, carbon trading may be between the countries and also within country. 

History of Carbon Trading

There is not very longer history related to the carbon trading. This term was actually coined or defined in kyoto protocol in 11 december 1997. In that time 180 countries signed in strategic protocol to reduce GHGs emission. In order to reduce emission, Kyoto protocol creates 2 types of carbon credit which represents one tonnes of carbon dioxide equivalent.

VER:

A carbon offset that is traded in the over-the-counter or voluntary market for credits is known as a voluntary emissions reduction (VER).

CER: 

Emission units produced within a legal framework with the goal of offsetting a project's emissions are known as certified emissions reductions (CERs).

 The fundamental distinction between the two is that the CER is regulated by a third-party certifying authority, whilst the VER is not.