Pollution Trading Credits And Corporate Pollution
...Many economists have recently recommended them, and the United States has actively promoted this method of curbing pollution. Pollution trading was discussed as one way to implement the global climate treaty, which was signed in Kyoto in 1997. At this meeting, the United States introduced a program that rewards countries who are willing to reduce greenhouse emissions further than required by the treaty. The countries can sell credits for their excess reductions to other nations, who then can count then count them to their own goals. Pollution trading credits are a vital, but controversial approach to controlling the world's pollution problems. This report examines the pros and cons of pollution trading credits and gives examples of various programs currently implemented.
The United States assists Mexico in reducing their current vehicle emissions. Mexico spends little or no money for this, and the United States takes credit for curbing pollution in Mexico. This is a very basic scenario, but generally it is that simple. Government backed pollution trading programs have been around since the 1970's, but only recently has pollution trading become a huge commodity. Sulfur dioxide, nitrogen oxide, particle matter, volatile organic compounds, and even hog manure are just a few of the commodities that are traded on a daily basis (Murphy). Firms, such as Natsource (http://www.natsource.com), in downtown Manhattan, take care of much of the dirty work. This company alone has brokered over $5,000,000,000 (five billion) dollars in greenhouse gas emissions, sulfur dioxide, oxides of nitrogen, and renewable energy certificates (Natsource). Natsource and other firms, such as Evolution Markets, allow various techniques to trade such as swaps, forwards, puts, calls, and options. Sulfur Dioxide allowances can be used as collateral, loaned, or swapped for other...
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