Carbon Credits ExplainedOver the past one hundred years the capitalist economy we live in has improved our way of living. It's enabled us to progress itself through the years. The free market has provided us with the resources to travel the globe, to give us products beyond our wildest dreams and to build great cities. The free markets accurately reflect the supply & demand within our nations. It allows us to price everything from agriculture to medicine. Capitalism effectively prices even our most valued resources.
However despite all of our humanities achievements. capitalism fails to recognize the impact global warming has on earth due to carbon emissions. Ever since the 1950's co2 in our atmosphere has risen to 300%. According to actual scientific data. Direct climate emissions is to blame for global warming.
The recent change in global temperature has had negative impacts on our world. It has melted away the polar ice caps, destroyed wildlife and has created more powerful tropical storms. Sea levels globally have risen to 4-8 inches with the past 100 years and global warming could eventually lead to an underwater Manhattan. So is it possible to use capitalism our primary tool to solve global warming our #1 problem.
Currently people have little motivation to change their life-style to help the earth. So why not use our money?
Which is humanities #1 motivation tool- Introducing . Carbon credits are these finical instruments that represent a reduction of carbon emissions into our atmosphere. These carbon credits via a carbon tax place a monetary price on our populating activities. People can earn more on carbon credits because there is money/rewards to be earned by reducing co2 emissions. also by trading these carbon credits we can use market forces to reduce carbon emissions at the lowest cost for society.
This is how a carbon tax works? When co2 is burned to produce energy it also releases pollution. A 'limit' on certain carbon emissions will make companies want to use less pollution because it will cost them less. It will be in their best interest to minimize global warming via carbon emissions because it will produce a carbon tax for that particular business and the U.S. will break free of its oil addiction. This carbon cap will ensure that we as a society do not go over the limit and should set the USA on a course of energy independence.
So will carbon tax and carbon credits work? Many environmentalist like this idea of tackling there problem that their agenda have pursued for so long, but many economist don't think the economics add up. Many critics say its just a scheme to get the developing world down (i.e. India, China, Brazil, etc.). Where as in these nation there's very little luxury of being able to go green in the 3rd world.
Some businesses have already created such trading systems to reduce global warming. The Chicago climate exchange is the world's first one and the USA only trading exchange for carbon credits. With the international adoption of trading standards we can finally begin to acknowledge and account for the environmental impact of our progress.
Carbon credits explained article by Andre Brown