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Carbon Trading |
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Carbon Trading is referred to the trading of carbon credits earned by several industries who manage to reduce the level of carbon dioxide emissions to a considerable range. Carbon trading market has seen a considerable growth in the recent years.
"Carbon Trading" is a promising market and it is experiencing a marvelous growth. "Carbon" is now single most leading commodity that is traded in market. Carbon trading basically refers to trading of carbon credits. These carbon credits are earned by any company who utilizes eco-friendly technology to reduce carbon emissions.
Developing industries have also lead to increase in emission of carbon and other type of harmful gases. The result is global warming. In order to reduce the emission of harmful gases, several developed nations have signed an agreement known as Kyoto protocol. According to this agreement, the countries for each reduced tonne of carbon dioxide emission, a carbon emission certificate is awarded. This certificate can be traded in market, which is known as Carbon trading.
Carbon trading has opened a new earning source for several countries. Carbon trading has dual effect apart from earning monetary value, the impact of harmful gases are also reduced. How Carbon trading actually works is a big question. Every country has a central authority who fixes the limit of amount of pollution that is permitted to emit in the atmosphere. This limit is the permit that any industry is allowed to emit carbon dioxide and other harmful gases. This limit is again divided into further smaller limits and is distributed among several companies in the form of credit. Once, the limit is maintained by any company, the company is awarded with credits. These credits can be traded in the market.
Carbon trading is a big opportunity for developing countries. It is known that almost all industry based countries are huge buyers of carbon credit and on the other hand all developing countries, where industrialization has not reached that height are seller of carbon credits. Japan is the largest buyer of carbon credits and Brazil and India are the biggest suppliers of carbon credits. Companies that are investing in windmills, biodisels, and biogas are mostly benefited by carbon trading as investing in such non-polluting resources which fetch the company carbon credits in the form of certified Emissions Reductions (CER).
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