Kyoto Protocol, Carbon Offsetting, and Certificates
Carbon dioxide emissions into the atmosphere, and the emissions of other GHGs, are often associated with the burning of fossil fuels, like natural gas, crude oil and coal. While this is harmful to the environment, carbon offsets can be purchased in an attempt to make up for these harmful effects.
The Kyoto Protocol defines legally binding targets and timetables for cutting the GHG emissions of industrialized countries that ratified the Kyoto Protocol. Accordingly, from an economic or market perspective, one has to distinguish between a mandatory market and a voluntary market. Typical for both markets is the trade with emission certificates:
- Certified Emission Reduction (CER)
- Emission Reduction Unit (ERU)
- Verified Emission Reduction (VER)
Read more about this topic: Carbon Footprint