Socially Responsible Investing 101: How to Buy Carbon Credits Wisely

The effects of environmental neglect have become more evident over the years. This has prompted environmentalists and government agencies to promote the use of eco-friendly and energy-efficient equipment, particularly among industries that produce significant amounts of carbon dioxide emissions. These industries can subsequently take advantage of economic incentives in the form of carbon credits, which are counter-pollution measures designed to reduce emissions and support environment-friendly tasks such as tree planting.

In essence, a carbon credit represents a corresponding permit to produce a ton of carbon dioxide. A company that succeeds in lowering its carbon dioxide emissions can sell carbon credits to a company that has exceeded its emissions quote or cap to ultimately even things out and help minimize the amount of carbon dioxide released into the air. This concept has since caught on among third-party investors who buy carbon credits wisely, as they would trade equities.

Apart from being sold to companies that need to reduce their carbon dioxide emissions, carbon credits can also be sold to individual investors. Funds generated from the sale of carbon credits go into worldwide efforts dedicated to reducing the amount of greenhouse gas emissions. Investors who purchase carbon credits thus help fund reforestation, research and development, and fuel-switching initiatives.

Investing in carbon credits is best done through a carbon fund exchange, a market organization similar in concept to a stock exchange. As with traditional stock trading, it would be wise to rely on professional services when investing in carbon credits. Choose financial consultants from reputable firms like Emerald Knights Consultants Ltd. who have proven experience in the carbon credit market.

Despite an apparent oversupply of carbon credits, the global carbon credit market exceeded $142 billion in 2011. Substantial profits thus potentially await those who seize carbon credit investment opportunities at the right time. But to avoid significant losses, first-time investors should carry out extensive research about carbon credit trading basics.

Ethical investing, particularly the kind that funds projects with environmental worth, has undoubtedly surged in popularity. In any case, investors should take the necessary precautions and carry out due diligence to steer clear of those who are simply cashing in on this profitable trend. Individual and institutional investors should therefore assess each investment opportunity before turning over their hard-earned money.

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