Carbon credits
Carbon credits are freely tradable permits that organisations must submit to match the volume of their carbon dioxide emissions. The idea of the carbon credit is rooted in the principles of environmental economics: what was once free to the polluter (the consequences of pollution) is now something the polluter must pay for (i.e. a permit to emit a specified amount of C02). In the UK about 60% of businesses face regulations governing the amount of C02 they can emit. Companies that can reduce their emissions cheaply do so - then they sell the accrued carbon credits on to those for whom it is cheaper to buy credits than it is to reduce emissions. The number of credits in circulation is controlled and finite - and shrinking.
This principle is global, embedded in schemes like the Kyoto Protocol, the European Union Emissions Trading Scheme (ETS) and the New South Wales Greenhouse Gas Abatement Scheme. In America a group of north-eastern states is currently working on a collective carbon trading framework (the Regional Greenhouse Gas Initiative). The European Union scheme (ETS) which covers heavy industry (e.g. electricity generation and cement manufacture), is not yet allowing companies to offset their emissions with credits from new forest sinks but negotiations to include them are underway. in Australia the Greenhouse Gas Abatement Scheme already includes such sinks and it is expected that the new American scheme will do likewise. The Kyoto Protocol allows for developed countries to 'buy in' carbon credits from developing nations to meet their own emissions reduction targets. Forestry projects in the least developed world are awarded internationally tradable credits on this basis.
The credits referred to above could be said to be 'statutory' credits, existing as they do through legislation. The type of credit produced by Forest Carbon is the 'voluntary' credit and these sort are gaining increasing interest worldwide. Voluntary credits are by their nature free of regulatory requirements but we believe they should meet all statutory standards regardless. Certainly buyers of Forest Carbon voluntary credits can be confident that they are making the same contribution towards solving the global warming crisis as those forced to do so by law.
The credits referred to above could be said to be 'statutory' credits, existing as they do through legislation. The type of credit produced by Forest Carbon is the 'voluntary' credit and these sort are gaining increasing interest worldwide. Voluntary credits are by their nature free of regulatory requirements but we believe they should meet all statutory standards regardless. Certainly buyers of Forest Carbon voluntary credits can be confident that they are making the same contribution towards solving the global warming crisis as those forced to do so by law.
