Carbon Credits
Certified solutions to reduce greenhouse gas emissions
What are Carbon Credits?
Carbon credits aim to help reduce greenhouse gas emissions, primarily in the most polluting, industrialized countries. As their name suggests, they are credits traded on the carbon market, also known as Certified Emission Reductions (CERs), equivalent to one metric ton of carbon dioxide.
In practice, this means that each country has a quota of Greenhouse Gases (GHG) and that, if it exceeds it, it can reduce it by buying carbon credits from other, less polluting countries.
How it works?
This dynamic operates not only at the national level but also among companies. Projects that reduce emissions are typically related to energy, transportation, agriculture, and waste recycling.
Quota Allocation
Cada país recibe una cuota de emisiones de Gases de Efecto Invernadero (GEI).
CER Certification
The projects generate Emission Reduction Certificates equivalent to 1 metric ton of CO₂
Marketing
Countries or companies that exceed their quota can buy bonds from less polluting countries or companies
Global Reduction
The goal is to reduce global CO₂ emissions and mitigate global warming
Carbon Markets
There are two main types of carbon markets
Regulated Market
For companies and governments that are required to control their greenhouse gas emissions
Voluntary Market
Organizations that voluntarily develop emissions reduction projects and sell their certificates
Clean Development Projects
FAO certified examples
Avoid Methane
Energy and fertilizer company that obtains fertilizer from livestock waste dumping in Pakistan
Biogas
Capture and combustion of methane derived from manure treatment in Armenia
Biomass
Generating electricity from mustard crop waste in India
Reforestation
Tree planting for timber, firewood and fodder production on degraded lands in Bagepalli, India
Pasture Afforestation
Establishment and management of forest plantations in Tanzania
Critical Perspective
Critics of this model argue that the carbon credit system does not contribute to reducing the concentration of CO₂ in the atmosphere, nor does it mitigate global warming, which was the objective of the Kyoto Protocol, the originator of carbon credits, more than fifteen years ago.
In this decade and a half, they have also received criticisms such as that large projects (with a large volume of reductions) have few benefits for the local population, and small projects encounter many difficulties
Furthermore, many of these projects are being developed in emerging countries, not in industrialized ones, which are the most polluting.