Carbon offsetting aims to compensate for greenhouse gas emissions. It is a solution for the elimination of global warming and climate change. In this sense, solutions that will cause less damage to the environment have been researched. One of them is balancing carbon. Carbon offsetting is also a financial instrument that is being implemented. With carbon offsetting, companies, institutions, governments, or individuals offset the carbon footprint they reveal in the vehicles they use, in production or at home, at work. Institutions, organizations, and even individuals can do many things to reduce greenhouse gas emissions and benefit from carbon offsetting. In this sense, the carbon offset market has been established separately.
What is the Carbon Offset Market?
There are two types of markets for carbon offsets. One of them is in the name of compliance, and the other is in the name of volunteering. Companies, governments, or other organizations in the compliance market, such as the European Union Emissions Trading Scheme, adhere to mandatory and legally binding limits on the total amount of carbon dioxide they can emit per year. At this point, they buy carbon offsets and face the consequences such as fines or legal sanctions if they don't comply with these mandatory limits.
According to the report published by World Bank State and Trends in 2020, 61 carbon pricing initiatives are implemented or planned globally. These 61 tariffs are pricing initiatives that include emissions trading schemes (such as cap and trading systems) and carbon taxes. They represent carbon markets, but not all contain carbon offset provisions. They only emphasize ensuring emission reductions in the activities of institutions and organizations.
Original Compliance What is the Carbon Market?
It was initiated by the Clean Development Mechanism (CDM) of the Kyoto Protocol. However, the Kyoto Protocol will expire in 2020 and will be replaced by the Paris Agreement. This will not cause any change, and compatibility will be maintained.
A carbon market facilitated by the CDM has been established for the signatories of the Kyoto Protocol. Those in the original compliance carbon market accept mandatory emission reduction targets that are (in part) enabled through carbon offset purchases by high-income countries from low- and middle-income countries.
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Çağın Ergün
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