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| Home » Carbon trading » Effectiveness of Carbon Markets
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Effectiveness of Carbon Markets |
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Effectiveness of Carbon Markets lies in reducing the Greenhouse gas emissions greatly. It is primarily related with trading of carbon emission particularly carbon dioxide.
Global warming is increasing day-by-day and nations are taking initiatives to mitigate the problem. Continuous climate changes have urged the nations to improve the environmental performance. They have joined hands at Kyoto to reverse the effect of carbon emissions. With this regard, several economic changes have been implemented for overall gains. In fact, carbon market along with its trading helps countries to control carbon emissions under the Kyoto Protocol.
In a cap and trade system, a central government grants a limited amount of carbon dioxide to be released in the environment. It then divides this amount of CO2 into units that are finally allocated to several groups. Ultimately, companies can trade with these units for any other commodity or in the form of money.
According to the report of the Intergovernmental Panel on Climate Change (IPCC), due to global warming, there is change is rainfall pattern, continuance of seasons and frequency of extreme weather. Hence, there is an urgent need to avert the impact of negative climate changes and global warming.
Creating a carbon market, indeed, enables individuals to participate in a global activity to address the issue of climate change collectively. Moreover, cap and trade or emission trading, carbon tariffs and taxes are economic approaches towards control of GHG or Greenhouse gas.
The carbon market creation benefits countries by meeting the sustainable development commitments and climate change priorities. It also ensures mobilizing of finances for cleaning technologies across the globe.
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