April 9, 2023: The policy will include forcing the most polluting facilities to curb down their maximum carbon footprints, or pay a carbon credit. What is carbon footprint and what are carbon credits? A ReferencePepper!
The Australian Parliament has come up with revolutionary national laws to force the country’s biggest greenhouse gas polluters to reduce their emissions or pay for carbon credits.
These reforms are of extreme significance to Australia to meet their target of reducing emissions by 43% below 2005 levels by the end of this decade and net-zero emissions by 2050. These reforms would be executed July 1 onwards to create a ceiling on the national emissions and reduce the same at a rate of about 4.9% a year.
This will include forcing the most polluting facilities to curb down their maximum carbon footprints1, or pay a carbon credit2, a permit which allows a country or organisation to produce a certain amount of carbon emissions. This amount can be traded if the full allowance is not used.
What are Carbon Footprints and Carbon Credits?
Carbon credits are a way to reduce the amount of greenhouse gases that are released into the atmosphere. These greenhouse gases, such as carbon dioxide, contribute to global warming and climate change.
A carbon footprint1 is a measure of how much carbon dioxide and other greenhouse gases are released into the atmosphere as a result of the things we do, like driving a car or using electricity.
Your carbon footprint is the amount of carbon dioxide released into the air because of your own energy needs.
To understand your own carbon footprint, you can think about all the activities you do in a day that use energy, such as using lights or charging electronic devices. Every time we use energy, we release greenhouse gases, such as carbon dioxide, into the atmosphere.
Similarly, when we eat food, we are also contributing to our carbon footprint. For example, if we eat meat, the production of the meat releases greenhouse gases into the atmosphere.
Even the things we buy and the way we travel can affect our carbon footprint. For example, if we buy products that are made far away and need to be transported to our location, this transportation creates emissions that contribute to our carbon footprint.
Photo by Louisa Potter on Unsplash
It's important to be aware of our carbon footprint and take steps to reduce it, such as using public transportation, eating more plant-based foods, and turning off lights and electronics when they're not in use.
By reducing our carbon footprint, we can help mitigate the effects of climate change and protect the planet for future generations.
Electricity, Transportation, clothing among other goods and services are essentials. But how you choose, how much, what source and the process you choose can make a difference.
Read the article below for more details:
Carbon Credit2, as defined by Investopedia, are "Permits that allow the owner to emit a certain amount of carbon dioxide
or other greenhouse gases".
Carbon offsetting means compensating for the carbon-dioxide pollution you're making i.e. your carbon footprint by contributing to prevent the same amount of pollution from happening somewhere else.
Also known as carbon offsets, these are permits that allow the organisation to emit a certain amount of carbon dioxide or other greenhouse gases. One credit permits the emission of one ton of carbon dioxide or the equivalent in other greenhouse gases. by preventing a tonne of CO2 from entering the atmosphere elsewhere on Earth (for example, by investing in renewable energy) or by removing a tonne of CO2 that's already up there. One example could be by supporting tree planting as the trees will pull CO2from the air when they grow.
To understand carbon credits, imagine that there is a school that wants to reduce its carbon footprint. One way it can do this is by reducing the amount of electricity it uses by turning off lights and electronics when they are not in use. Another way is by using renewable energy sources like solar or wind power.
Once the school has taken these steps to reduce its carbon footprint, it can earn carbon credits. These credits represent the amount of greenhouse gases that have been prevented from entering the atmosphere because of the school's actions. Each credit is equal to one metric ton of carbon dioxide, or an equivalent amount of other greenhouse gases.
The school can then sell these carbon credits to other organizations that are looking to reduce their own carbon footprint. These organizations may be unable to make the same changes as the school due to financial or logistical reasons, so they can purchase the credits to offset their own greenhouse gas emissions.
In summary, carbon credits are a way for organizations to take responsibility for their greenhouse gas emissions by investing in projects that reduce those emissions elsewhere, such as renewable energy or energy efficiency projects, and receiving a credit for each metric ton of carbon dioxide equivalent they avoid emitting. The credits can then be bought and sold on carbon markets, encouraging further emission reductions.
The Carbon Credits motivate the companies to reduce their Carbon footprint through a monetary incentive. Those who are still unable to reduce emissions can still operate, but at a higher financial cost.
Glasgow COP26 climate change summit in November 2021 agreed to create a global carbon credit offset trading market.
Back to the main article:
Opposition climate change and energy spokesperson Ted O’Brien believes that capping emission rates will outsource the industries and related investments to countries like China and India, and increase their market prices in Australia.
“This is a tax that will see prices go up in the midst of a cost of living crisis where every household across this country is feeling the pain of prices going up,” he added. However, the government argues that without the mechanism, Australia would only reduce its emissions by 35% by the end of the decade, which will not possibly exceed the existing annual pollution level of 140 million metric tons (154 million U.S. tons). Eventually, the cap will be brought down over time.
The big polluters may buy carbon credits to help achieve their emission targets, but if they use these credits to achieve more than 30% of their target, then they would have to provide an explanation for their actions.
If their plan takes off, then Australia’s greenhouse gas emissions would reduce by 205 million metric tons (226 million U.S. tons) by 2030, almost equal to removing two-thirds of Australia’s cars off the road at the same time.
