Sunday, December 13, 2009

Want to invest in carbon ?

Can you actually believe that there is a market price for carbon ?!

Carbon credits are an attempt to save the world by monetizing the reduction of carbondioxide and green house gas emissions since people never listen unless it is about money. Gist - Emit green house gases and pay a fine; Reduce emission and get paid for it. For purposes of measurement, one carbon credit is equivalent to a ton of carbon.

To explain it in very simple terms, if I own an industry that is legally allowed to emit only 100 units of carbon when it actually emits 200 units (this is called a carbon source), then either I have to invest in reducing this emission or I invest in afforestation (trees consume CO2, remember ? This acts as a carbon sink) such that the 100 units of carbon are ''absorbed''. This would be applicable to all carbon sources - be it an industry, a car or a house. This concept was discussed and it took shape way back in 2006 but implementing it hasn't been quite easy.

And in the meanwhile, international trading of carbon is already gaining momentum....mainly because there are certain areas that are industrialized and certain that are purely vegetated. So the idea is for those who have excess carbon credits to sell it to those who have few or none.

The other side of this issue is knowing and determining the usability of an area as a carbon sink with a certain accuracy. This depends on the amount of vegetation or what is known as biomass. In simple terms, it is plant matter. Determining the biomass in a region would mean knowing the density as well as type of vegetation - types of trees, their height etc. This is one of the objectives globe monitoring satellites are trying to accomplish today, for the sake of the earth, let's hope they soon succeed.

Water has a market price, carbon has one now, wonder when we would start paying for oxygen too....
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Website Hit Counter I had decided to have a counter only after I hit a 1000 views and since it happened last week (as on 14 Dec 2009), now is the time to see some stats :)