Benefits And Disadvantages Of Carbon Trading

Benefits And Disadvantages Of Carbon Trading<br /><br />As a result of increased concern over global warming because of greater carbon emissions in the air, governments and other organizations have been searching for effective solutions to the issue of pollution. Among many other strategies for dealing with this issue, carbon trading and carbon offset have been highly successful.<br /><br />Carbon trading involves organizations buying carbon credits from the market. The credits restrict the level of greenhouse gases that companies can discharge in to the air without being penalized for it.<br /><br />The basic benefit of the carbon trading method is that it rewards lowering of emissions. The idea is that companies will realize that adopting greener methods of carrying out business is more profitable than facing penalty for carbon credits. If a company is made to pay for polluting the air then it will try to adopt methods that are less polluting if it desires to stay competitive. With the number of businesses that adhere to this system rising, the quantity of overall emissions by countries will reduce, thereby making the environment cleaner.<br /><br />One more benefit of the carbon trading system is its free market model that allows any organization to buy carbon credits or offer them for sale. As a result of non intrusion from the local administrations such as levying of fines or creating regional legislations, this method is quite successful.<br /><br />The greatest problem however with carbon trading is that a global framework for trading is yet to be formulated. As most of the trading happens in the international markets, it is tough for some regional businesses to follow this system.<br /><br />Some businesses are unwilling to adopt this system, as they do not want to incur costs that cannot be passed on to their customers. Further, numerous small organizations are not capable of affording the expenditure on buying the technology or implementing state of the art techniques that would lower their emissions. Therefore, they are caught in a position that makes them bear the costs of carbon credits continuously and thus they fall behind in the race against larger organizations.