Chapter 1 LO5 Concept Of Carbon Trading Flashcards
Outline the aims of carbon trading and how the process works
Carbon trading is a method that aims to reduce carbon emissions of a nation. It does this as a nation is given a certain number of carbon credit based on its national target set by the KOYOTO Protocol (Agreement took place in 1997 came into effect in 2005)
4 Advantages of carbon trading
F- FINANCIAL INCENTIVE: companies provided with an incentive to reduce polluting processes and equipment to a minimum, generate revenue through sales of credit.
F- FLEXIBILITY: Allows companies to enter a period of transition that suits them and their unique needs.
E- ENVIRONMENT: Scheme should have a reduction of C02 emissions.
C- CONTROL: should have a government with control over the level of C02 emissions of the country.
State 4 disadvantages of carbon trading
D- DIFFICULTIES SURROUNDING THE MEASURING OF EMISSIONS: Carried out by the company, this is why validity is questionable.
E- ECONOMY: Large businesses dont get involved, where as with smaller businesses buying carbon credit would be cheaper than getting less polluting technology. Carbon credit is said to be too cheap. Reasoning for this taking place.
C- COMPLEXITY OF THE MARKET: There are difficulties in governing the carbon trading scheme as a result of this markets are open to fraud and manipulation.
S- SIZE OF PERMITS: A number of nations could have inflated their quantity of credit to have a larger limit. This leads to nations having excess permits, which they can sell, generating profit
Carbon trading is a policy used to alter greenhouse gas emissions. Explain what is meant by carbon trading. Also outline 3 aspects of how it works in practice.
Carbon trading is an exchange of carbon trading between countries. Countries are assigned maximum carbon emission levels. If a country exceeds its maximum levels it is penalised. Countries that have higher carbon emissions can buy the right to release more carbon dioxide into the atmosphere from countries that have lower carbon emissions.
State one reason why carbon trading policy may not alter greenhouse gas emissions
Market is open to fraud
Credit limits may be too high
Difficult to measure emission
