Though I’m familiar with the concept of carbon offsets, carbon trading as been gaining more press as of late, and it is time to explore it in more detail. Offsets are more popular among consumers, allowing us to make up for (or “offset”) the carbon that we create from daily life (electricity, heating and cooling, driving ? etc.). The ClimateBiz Emissions Trading website offers a great description of carbon trading. “A trade typically occurs when a company seeking to reduce its emissions purchases emissions credits from a company that has reduced its emissions beyond its requirements to do so.” Reading this I had a feeling that I was only starting to scratch the surface, so I kept searching for more info on the subject of carbon trading.
DriveNeutral’s own website has a wonderful visual and written description of carbon trading on the What We Do page. After you scroll past the nifty pictures, you get to a more detailed Q&A about how DriveNeutral is actually making a difference. Mentioned very early on is the Chicago Climate Exchange. “When you buy a carbon-neutral certification from DriveNeutral, we buy emissions reduction credits on your behalf through the Chicago Climate Exchange (CCX). The Chicago Climate Exchange supplies the highest-quality, third-party-verified, and legally accountable emissions reductions credits available today.” Now we are getting somewhere! “Founded in 2003, the Chicago Climate Exchange functions as a kind of stock market for the reduction of greenhouse gas emissions. Its 200+ members include companies like DuPont, Bayer, Baxter International, and American Electric Power. The states of Illinois and New Mexico have also announced their commitment to join. Membership is entirely voluntary, but members are legally bound to comply once they join.”
So, carbon trading is done between companies that need to meet certain regulations. Who is monitoring all these transactions and making sure that companies comply with their agreements? I’ll be exploring this topic and the Chicago Climate Exchange in particular in my next post, so stay tuned! Until then, I have a question for my fellow readers: why do you buy carbon credits or participate in carbon trading?
Victoria Everman
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1. Posted by David Neubert over 4 years ago.
I used to trade Latin American debt back in the early 90's when the emerging ideas of turning that defunct debt into investment and growth in the debtor countries started. Funny but I have to say the same cast of characters who got involved in that market back then are now doing carbon credit trading. I think this will become a more vibrant market as time goes on.
Thanks for your post.