image source: verner
Carbon credits are a policy tool used to control the amount of GHGs released into the atmosphere.
Each credit represents the right to emit one ton of CO2 or an equivalent amount of other greenhouse gases. Businesses can buy or sell carbon credits to offset their emissions (VREnergy, 2024).
Below are some advantages:
Appealing commitment to decarbonization: Purchasing carbon credits allows companies to declare their commitment to decarbonization with clear guidelines and tangible activities.
This declaration can be a social acknowledgment of a company’s efforts toward decarbonization. By making such declarations, companies may also encourage others in their industry to follow suit, creating a positive cycle.
Economic incentives for reducing emissions: Carbon credits create a market-based system where companies are financially motivated to lower their carbon emissions.
By putting a price on carbon, it encourages investment in cleaner, more efficient technologies. This market-driven approach provides a flexible and cost-effective means for businesses to meet environmental targets.
Global reach and scalability: The carbon credit mechanism has a widespread impact due to its global applicability and scalability.
Carbon credits operate on an international scale, enabling countries and companies like mining companies around the world to collaborate in reducing emissions.
This global framework facilitates the transfer of green technologies and sustainable practices across national boundaries, enhancing the collective effort against climate change(“Advantages and Disadvantages of Carbon Credits – Echoshpher – Powered by OFFSEL,” 2024).
References:
Verner. (2024, March 5). 5 Benefits of Implementing Carbon Credits for Businesses—VRenergy. https://vrenergy.vn/en/5-benefits-of-implementing-carbon-credits-for-businesses/
Advantages and Disadvantages of Carbon Credits—Echoshpher—Powered by OFFSEL. (2024, July 17). Echoshpher – Powered by OFFSEL –. https://offsel.net/media-en/co2-reduction/carbon-credits/
