Saturday, December 1, 2007

Carbon Credits

Certified Emission Reduction (CER) credits are units to measure reduction in emission from greenhouse gases (GHG) like carbon dioxide, hydro and chlorofluorocarbons, etc.

One carrbon credit is equal to 1 tonne of CO2 reduction.

The 170 countries who agreed on the Kyoto Protocol set quotas on emmisioon of installations run by local businesss, called 'operators'.

Each operator has an allowance of credits, where each unit gives the owner the right to emit one metric tonne of carbon dioxide or equivalent GHG.

Opeators who have not used up their quota, can sell their unsed allowances as carbon credits, while business that exceed quota , can buy the extra allowances as credits.

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