The biggest carbon emissions trading scheme currently in operation is the
European Union Emissions Trading System (ETS).
Countries are given a national allocation of how much carbon dioxide they can emit, which is then divided up among the companies covered by the scheme. If companies emit more than they are allowed they must purchase permits to make up for the excess. If they emit less, they can sell their unused allocations. The ETS has already started. It began in 2005, but the second phase of the scheme started on January 1, 2008, and will last for five years.
Carbon Offsetting
Offsetting is based on the idea that an investment in a ‘green’ project will offset the carbon used for something else. However, whilst many companies offset carbon, it is considered to be very controversial by environmental groups. Offsetting schemes are unregulated and therefore are open to fraud. They also require an accurate measure of the emissions to be offset. The UN's Intergovernmental Panel on Climate Change (link to this page of the website) found a margin of error of 10% with measuring emissions from making cement or fertiliser; 60% with the oil, gas and coal industries; and 100% with some agricultural processes. Measuring emissions from aircraft is particularly difficult as there is disagreement about what exactly should be measured. Offsetting also requires an accurate measure of the carbon saved elsewhere which is just as difficult. Many environmental lobbies and pressure groups believe that rather than offsetting, humans needs to change their behaviour patterns and reduce their carbon.
For more information about calculating your Carbon Footprint
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Carbon Capture and Storage (CCS)
Carbon capture and storage, also knows as carbon sequestration involves extracting CO2 at power stations then pumping it underground. The term is also used to describe biological techniques such as biochar burial, which use trees, plankton, etc to capture CO2 from the air. Capturing and compressing CO2 requires much energy and would increase the fuel needs of a coal-fired plant with CCS by 25%-40%. These and other system costs are estimated to increase the cost of energy from a new power plant with CCS by 21-91%. This cost is for either purpose-built plants near a storage location: applying the technology to preexisting plants or plants far from a storage location. Storage of the CO2 is likely to happen either in deep geological formations, in deep ocean masses, or in the form of mineral carbonates. A general problem is that long term predictions about submarine or underground storage security are very difficult and uncertain and CO2 might leak from the storage into the atmosphere.