Carbon trading is a concept we may or may not be familiar with. We may have heard of it, but not know what it is about and how it works to lower the carbons being emitted to the air.

How does the carbon emissions trading scheme work? A government basically works out the amount carbon emissions are transmitted into the air by each industry. It then lowers the total percentage to meet their international duties. Each industry has to then meet the lowered target or pay a fee depending on how much they have exceeded. When a company cuts its emissions below the level, it can sell their unused amount to other companies who may need more carbon credits to avoid fines.

Just how are these industries suddenly lowering their emissions? How are these lowered emissions enough to observe the authorities’ prerequisites & still be enough to allow them to sell to their contemporaries as carbon offsets? You’d think if it is possible nowadays, it is most likely possible then. The fact of the matter is, industries are more likely to be more sensitive to these issues when there are fines imposed.

There is one poor flaw however-carbon trading can & most likely will affect the masses. Because industries might suffer from big fines arising from carbon trading, they can charge the consumers so their profit is still present even if they pay fines. There is still space for betterment, of course, because carbon trading is generally a new concept not many are too familiar with.

The good thing about carbon trading however, is that even if it isn’t a perfected process, it has already helped the environment a great deal. According to the World Bank’s Carbon Finance Unit, 374 million metric tonnes of carbon dioxide equivalent (tCO2e) were exchanged in projects in 2005. It signifies a 240% increase comparative to 2004 (110 tCO2e) which was itself already a 41% increase comparative to 2003 (78 tCO2e).

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