What Are Carbon Credits?
In 2013, the United States launched a cap-and-trade program to mitigate carbon dioxide emissions through carbon credit trading, encouraging companies to switch to cleaner alternatives.
Carbon trading is not only an effective initiative to reduce air pollution, but it also guides businesses on how to become more sustainable.
A carbon credit is a tradable permit that allows companies to emit carbon dioxide—the main cause of climate change.
If companies cannot use all of their carbon credits, they can either sell them or invest them in energy-saving operations that will help reduce emissions through low-cost methods.
How Do Carbon Credits Work?
The Carbon Credit system helps mitigate the continuous emission of greenhouse gases. As mentioned, companies will get credits equal to a ton of allowed emission of greenhouse gases.
These credits may decrease through the years as a way to adapt to cleaner technology.
The governments also reduced the number of permits and credits given to the companies. So, the companies have to buy more credit.
However, with its cheap price, businesses who wish to buy more credits can do so without worrying so much about its cost.
In which, the essence of regulating the emissions is somehow overruled. This is one of the examples of what to improve with the program – regulating the credits.
When a company exceeds the amount of gas emitted, it can offset its emissions by buying more credits. But, if a company did not consume all its credits, it can sell them to other consumers or companies.
For the companies that can meet carbon offsetting, they get rewarded with extra carbon credits. With these credits, they will have the option to source funds to invest in clean technology and reduce their greenhouse gas emissions.
The Wonders Of Carbon Offsetting
Carbon offset gets often associated with carbon offset credit. There is a big difference between the two.
The first one is the amount of sustainable energy that balances the carbon emission, while the latter is the permit to emit carbon.
Carbon offset negates or reduces the emitted carbon dioxide through tree-planting, funding renewable energy, methane capture projects, etc.
These offsetting activities compensate for the emission of carbon dioxide and other greenhouse gasses.
To help slow down climate change and hopefully stop it, some projects can help in carbon offsetting.
Everyone is encouraged to buy carbon offsets to help fund projects that promote offsetting.
Carbon Credits In The Philippines
As the Philippines commits to reducing 75% of greenhouse gas emissions by 2030, it is the best time to start investing in carbon offsets.
Funding projects that can help reduce carbon emissions will go a long way in creating a safer planet for all.
The Philippines has enough space to bring these projects to fruition.
With the commitment of the Philippine government to address and support this climate change emergency, environment groups are now looking for investors willing to fund carbon offsetting projects.
It’s high-time that we treat the climate crisis as a real emergency.
Learn more about carbon offsetting and carbon financing by setting up an appointment with BAMA Law Firm today.