Carbon credits:tokens to eliminate the production of greenhouse gases

Carbon credits can be purchased by companies that want to invest in green projects in a manner proportional to the volume of pollution produced.

Companies with a large environmental impact can achieve the carbon neutrality through the purchase of carbon credits and investment in green projects.

Created within the 1997 Kyoto Protocol and confirmed in the 2015 Paris Agreement, carbon credits they are tokens that can be purchased by companies with a large environmental impact who want to achieve carbon neutrality, i.e. invest in green projects in a manner proportional to the volume of pollution produced.First, the amount of CO2 produced by the company is measured according to strict international standards, after which the company itself can decide whether it wishes to reduce or eliminate its production of greenhouse gases by purchasing the proportional amount of carbon credits.Each credit corresponds to one ton of CO2 absorbed.

 

 

To purchase tokens, the company can choose whether to rely on a specialized broker or invest directly in sustainable projects, created with the aim of reabsorbing global greenhouse gas emissions.The investment can take place either through the financing of a project yet to be implemented, or with the purchase of credits directly from the promoter of an already existing project, depending on one's economic availability and the risk/benefit assessment.

 

What are the risks for those who buy carbon credits 

In fact, like all purchases on the credit market, the purchase of carbon credits also involves risks:from regulatory ones, to financial ones, to the fluctuation in the value of the credits themselves, which depends both on the basic laws of the market and on the costs of implementing the projects.

When you decide to invest in an environmental project and obtain carbon credits, an Emission Reductions Payment Agreement (ERPA) is drawn up, i.e. a contract signed by the buyer and the developer, which includes all the details of the project, the costs of credits and the rights and duties of both parties.

The in-depth analysis of this news by Niccolò Ellena is on Money.it