Sustainable development with carbon credits

According to the climate change concept, the world is facing crisis following global warming through carbon emission at an alarming rate with its negative consequences in the form of adverse impacts. According to some economists cost of environmental degradation should be considered as negative income. The United Nations Framework Convention on Climate Change (UNFCCC or FCCC) is an international environmental treaty. The objective of the treaty is to stabilize greenhouse gas concentrations in the atmosphere. The treaty itself sets no mandatory limits on greenhouse gas emissions for individual countries and contains no enforcement mechanisms. In that sense, the treaty is considered legally non-binding. The principal update is the Kyoto Protocol, which has become much better known than the UNFCCC itself. The acceptance to the concept of Carbon Credit is a better start towards quantification of environmental degradation. Carbon dioxide, the most important Greenhouse Gas produced by combustion of fuels, has become a cause of global panic as its concentration in the Earth's atmosphere has been rising alarmingly. This devil is now turning into a product. Carbon Credits are a part of international emission trading norms. They incentivize companies or countries that emit less carbon. The upper limit of total annual emissions is fixed and the market allocates a monetary value to any shortfall through trading. The carbon off-setters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. Under the Kyoto Protocol, the ‘fixed upper limits’ or quotas for green house gases for the developed countries are known as Assigned Amounts and are listed separately. The quantity of the initial assigned amount is denominated in individual units, called Assigned amount units (AAUs), each of which represents an allowance to emit one metric ton of carbon dioxide equivalent, and these are entered into the country's national registry.