Topic: Air Pollution due to thermal power plants running on coal

There is Air Pollution due to thermal power plants running on coal. But still they receive incentive based on carbon credit. What is this carbon credit and how is it calculated?


Re: Air Pollution due to thermal power plants running on coal

Useful information from Investopedia regarding carbon credit:

"It is a permit that allows the holder to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their green house gases below their emission quota. Carbon credits can be traded in the international market at their current market price. The carbon credit system was ratified in conjunction with the Kyoto Protocol. Its goal is to stop the increase of carbon dioxide emissions.

For example, if an environmentalist group plants enough trees to reduce emissions by one ton, the group will be awarded a credit. If a steel producer has an emissions quota of 10 tons, but is expecting to produce 11 tons, it could purchase this carbon credit from the environmental group. The carbon credit system looks to reduce emissions by having countries honour their emission quotas and offer incentives for being below them."

This means that if one can reduce the carbon emission below the allotted quota, he can earn by selling the remaining carbon credit. If he cannot reduce the emission, he has to pay for the excess of carbon emission. The price of an Indian carbon credit is around 14 -16 Euros in international market.

Hence, if a power plant can reduce its carbon emission through some additional process, they can get a carbon credit. The later can be sold to others.

Last edited by anonymous (11-10-2011 <> 09:24:38 AM)