What are carbon credits, and how do they work?

Question

The general concept sounds confusing to me, so I don't think I get how they work. Thanks!

Answer 1

They are similar to the sale of indulgences, proposed and practiced by the Catholic church hundreds of years ago. Basically, you can make up for your bad actions with good ones, like giving money to the church, perhaps. Sounds reasonable, except that the church took advantage of people's emotions, and promised them things, truly only God could deliver, all the while filling church coffers. Carbon Credits are a pretty good modern day parallel if you study the history and think about what's going on today.

Answer 2

The most stupid idea ever. What they are is that each person say you for instance. You are given a certain amount of credits to heat/cool your house, drive your car. Once you have used them you can by them from someone else to continue living your life style. This is a micro example but how it really works is on a country level.

Kenya is given 1billion CC.

America is given 1 billion CC

Now America uses more each day because we have more industry and cars and well production than Kenya. Once America uses them up Kenya can sell us thier left over credits since they have no means of production for the most part.

It is nothing but a tax and a way to control manufacturing to bring down the wealthy countries to the level of poor countries rather than let poor countries become wealthy countries. This is the same model as social programs: Tax the rich and give to the poor which cleary does not work.

Al Gore has a company that sells CC or rather is ready to sell them if the UN ever gets control of the US economy which Barrak Hussein Obama would give them.

Answer 3

It's a way for you to feel better about giving people like Al Gore a truckload of money for nothing in return.

Answer 4

Some people are advocating a per capita carbon credit system as Ned S describes.  Much more likely is a carbon credit system applied to industry and tied into international obligations negotiated post Kyoto.  In this scenario developing countries would have to accept some restrictions as well as developed ones even though the per capita emissions are much less for the developing countries.  Thus there would be some burden sharing although clearly the developed world would face tighter restrictions.

Answer 5

I'm not going to get into whether or not carbon credits work, or whether they are good idea.  I'm going to try to just answer the question.  

The idea is to put a price on pollution.     Or a price on "green-ness."

Compare two little bits of electricity.  One is created from solar, the other created from coal.  Right now, these two bits of electricity cost exactly the same.   And while my electric toaster doesn't know the difference between the two, there is a difference - one is responsible for putting some pollution into the air, the other is not.    So when we produce the solar energy, we are really producing two things - the electricity itself, and a little bit of "green-ness."  That "green-ness" is a renewable energy credit, or a carbon credit, or whatever you want to call it.  You can also get carbon credits for other green activities, like reducing your pollution through energy conservation, and by doing things like planting trees.

Classic "carbon credits" are part of an international strategy to reduce greenhouse gases.   There are two steps to this process.  First, the amount of pollution that each country can emit is set at some limit.  Second, countries are required to buy carbon credits to make up the "green" different if they exceed their limit.

Since the US did not sign on to this plan, however, the meaning of carbon credits within the US is a bit different.   Right now, the US government doesn't certify these credits (since we aren't part of this international carbon trading plan).  But some private companies have started certifying credits for purchase.   These are sort of "private label" brands for these green tags.   This way, people in the US can buy local emissions credits to reduce their carbon footprint.

I know that this is long, and since you weren't specific about what part of the carbon trading confused you, I may have simplified things too much.  I would check out wikipedia entries for things like "carbon trading" and "green tags" and "renewable energy credits."  They will give you more detailed information.

Good question.

Answer 6

The first answer was nearly right but not quite.

Each developed country was given a carbon credit based upon their level of emissions in 1990. That means that a country like Kenya would have got far less credits than America. Those who are able to reduce their carbon emissions below the level of 1990 will have credits that they can sell to other countries who won't reach their target.

It has nothing to do with tax or controlling manufacturing to bring down the wealthy countries it is about ensuring that those who pollute pay for their pollution and that on a global scale we bring carbon emissions under control. I am sure that you would agree that if your neighbour threw their garbage in your yard you would expect them either to clear it up or to pay for someone else to clear it up?

Equating carbon emissions to the same model as social programs: Tax the rich and give to the poor is entirely false and simply an emotive way for some people to try to gather support for opposing it.

I can understand why you are confused when there are people who wilfully distort what is proposed or clearly don't fully grasp the concepts before opposing them!