As the green movement is underway, there are a lot of new terms that are thrown around. Carbon credits are one of them.
Until a few years ago this term did not exist. As global warming becomes a concern this term is thrown around. More than that, people talk about how positive carbon credits are. But, what are they and how does it affect us?
Carbon credits are used by companies and individuals to offset their own carbon emissions. The company purchases credits that will offset their own. Funds and carbon markets, like the Chicago Climate Exchange and European Climate Exchange, are set up to help exchange one's carbon credit. In many ways it is like eBay for carbon trading.
The main ingredient of a carbon credit exchange is the idea of government cap and trade. Meaning the government sets a limit on how much Co2 a company can produce. The company can purchase credits from another company or Co2 fund. These credits are generally found on the exchanges. This trading has become quite a big business. As the idea of the exchanges grow, look for them to become for mainstream us by consumers.
