And who gets the Money for it?
In: 0
There are different schemes. The EU has the largest one afaik.
They have set themselves a limit on how much CO2 should be emitted per year and that is how many certificates are sold. This number shrinks from year to year and the certificates can also be voided by owners if they don’t use or sell them.
They can be traded in an effort to encourage companies that can cheaply reduce emissions to do so, as they in return then make money from selling their certificates.
The money goes into a special fund that then is used to fund projects that help fight climate change, like investing in pilot projects or research.
I would add/clarify that in addition to the certificates that are traded as part of a cap and trade system, there is something called carbon offsets. The idea here is that if a company emits in an amount above their permitted level, they can still be fine as long as they pay for a carbon reducing program elsewhere. So say a company emits 1,000 more tons of CO2 than they have permission to, they could show that they funded projects that will reduce the CO2 in the atmosphere by at least 1,000 tons.
A critical element of this, and one that is at the center of why these are controversial, is that the offsets that the companies fund need to be projects that, without the company funding, would not have occurred. It is not enough, for example, to pay for an offset by giving money to an organization to not cut down the trees in a forest that they own if that organization was not planning to cut down the trees in the first place. This is a very hard thing to demonstrate, and a lot of people believe that these offsets are allowing companies to simply pay for excess pollution without actually doing anything to address it because the projects they are funding are things that would have occurred even without company funding.
Latest Answers