Going Green: Reducing Emissions through Carbon Credits
As a number of leading industrialized nations experience economic slowdowns, more people look into making alternative investments. At the same time, the need for ecological protection has made investors wary of putting their money into companies that are not committed to environmental protection—specifically, reducing their carbon emissions. Hence, a notable buzz word (or phrase) in international business these days is socially responsible investments (SRI).
SRI is not an empty slogan that street activists have coined to advance their political beliefs. Although it has been around for some time, it has gained more traction as a result of the Kyoto Protocol, which is an international, legally-binding agreement that aims to reduce carbon emissions. This has resulted to the creation of investment tools such as the carbon credits system, offered by companies like Emerald Knight Ltd., to encourage organizations to meet carbon emission reduction targets.
Carbon credits are awarded to a company that has reduced its greenhouse gas emissions below its set quota. This initiative aims to help address what is believed to be one of the causes of climate change. Carbon credits can be traded like commodities in the international market at their prevailing market price. Apart from providing incentive to reduce carbon footprints, the money collected from these credits are designed to encourage carbon reduction initiatives such as reforestation, tapping geothermal energy, solar and wind power, or capturing methane.
A carbon credit from a carbon investment program is also known as a Certified Emission Reduction (CER). It is equivalent to a ton of carbon dioxide or other greenhouse gases such as methane, nitrous oxide, and fluorinated gases. However, for credits to be given, projects must be approved based on strict procedural standards by the mechanism’s executive board.
Today, the system of carbon credits has remained high yielding. Thus, more people have been encouraged to put their money in companies which offer this investment portfolio. It’s like hitting two birds with one stone—earning money while protecting the environment.
In fact, various projects are now offered to interested investors throughout the world. This includes bamboo forestry investment, social housing in Brazil, and the carbon market in California. The latter is expected to be the largest of its kind, globally. With investments like these, it’s easy to join the green revolution.