What are carbon credits?

Carbon credits are supposed to be used to offset your carbon dioxide emissions. They are used to buy solar, or wind power, or something similar. Really, they're a bunch of crap, because you're still polluting the environment either way. But at least some money is going to alternative energy. Unfortunately, it makes some people think that they can just go crapping up the earth, and buy their way out of it.

Basically, economics dictates that everything better have a price put on it in the market, which determines its value. If emissions have no cost, polluting firms have no incentive to reduce their emissions. Unless, that is, these emissions get a 'cost' tag put on them, and this implies taxing the polluter because now he can pollute only up to the amount he can afford to pay for. So carbon credits are used in international emissions trading schemes. They work by putting a cap on total annual emissions and letting the market assign a monetary value to emissions through trading. Credits can be bought and sold between businesses in international markets at the prevailing market price. So if I'm a firm that has produced less emissions than the limit assigned to me, I can sell the remaining carbon units (that I'm allowed to emit as pollution) to some other firm that is going to exceed its carbon limit. Ultimately, the way I see it, carbon credits don't do much good for the environent at least in the short run. But by rewarding voluntary emission-control (by letting them sell their surplus credits) and taxing excessive polluters (by making them buy credits in order to function), you're basially providing an incentives-framework which, according to economics logic, should bring down the pollution levels. Because once you treat pollution as an input for a firm (for which it has to pay), obviously the firm will continue production only if its expected revenues match up to the input cost it is bearing (which is hiked up further by having to buy credits).

Al Gorr's "carbon credits" are an effort to lessen the effects of climate change and influence the general opoulation by encouraging them to purchase goods that have made no hamrful footprint on the environment - carbonwise, that is. For example, the carbona and energy used to haul a 747 across the Atlantic, full of chocolate bars - not very environmentally friendly. Buying carbon credits offsets greenhouse gas emissions, basically. But thats what "they" say, and I'm a bit of a skeptic myself... Carbon credits and the climate change issue are strictly disputed topics. The credits have often been the source of criticism. Criticism - as in jaxin's answer.

Everyone's already explained what they are, but I'd like to elaborate a bit about why they get such bad press. Carbon (CO2 actually) credits are ONLY effective if they make something happen that wouldn't have happened if not for that credit. So a credit to help an already green thinking person buy a solar hot water heater is really not effective at all, because that person would probably have bought it anyway. So there's no actual CO2 saved. But if that person had NO interest in doing their bit for the environment, and was ONLY interested in getting a SHW system to save money and without the carbon credit to help pay for it would not be financially viable. So then if that person decided not to get the system (and then just use a fossil fuel powered electric system for example), then the credit would be very valid, as the person paying the carbon credit really DID offset their own CO2 generation. Tree plantings are similar(ish). A CO2 credit going into planting plantation timber for eventual use as timber and/or paper has far less value as an offset as a program of native vegetation replanting. And even then the credit is only good if the plants don't later get burnt/chopped/cleared... So it needs to be in a carefully managed national park or similar. I agree carbon credits can be VERY murky waters, but they still have their place if used correctly, and even then should ONLY used as an absolute last resort (reduce your actual production of CO2 wherever possible first!) Hope that helps, and well done on deciding to do your bit. Great to have you on board. :O)

i think carbon credits can be applyed in all applications if you are taking about relating to nutrtrient sense the cycle of carbon in living being carbon dixoide is fixed by photosynthesis to form organic nutrition and restored by inorganic stae like respiration , proplasmic decay . any thing that is in a process creates a credit - or + 2/ tracer studies / isotonic conditions arch,geo logical dating