CARBON CREDITS

. One carbon credit is equal to one ton of carbon dioxide

key components of national and international attempts to mitigate the growth in concentrations of
greenhouse gases (GHGs)

The quality of the credits is based in part on the validation process and sophistication of the fund
or development company that acted as the sponsor to the carbon project. This is reflected in their
price; voluntary units typically have less value than the units sold through the rigorously
validated Clean Development Mechanism[2].

greenhouse gas emissions, especially for power, cement, steel, textile, fertilizer and many other
industries which rely on fossil fuels (coal, electricity derived from coal, natural gas and oil

greenhouse gases emitted by these industries are carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons (HFCs)

The IPCC (Intergovernmental Panel on Climate Change) has observed [3] that:

Carbon prices are normally quoted in Euros per tonne of carbon dioxide or its equivalent (CO 2e)

Kyoto Protocol, an international agreement between more than 170 countries

Other greenhouse gasses can also be traded, but are quoted as standard multiples of carbon dioxide
with respect to their global warming potential.

Currently there are five exchanges trading in carbon allowances: the Chicago Climate Exchange,
European Climate Exchange, Nord Pool, PowerNext and the European Energy Exchange

Louis Redshaw, head of environmental markets at Barclays Capital predicts that "Carbon will be the
world's biggest commodity market, and it could become the world's biggest market overall." [10]

If 0.01 of a ton of carbon emissions results from the wheat growing and the milling and the trucking and
the baking of a loaf of bread, then a tax of $30 per ton carbon will raise the price of bread by $0.30

carbon emissions in the United States, a tax of $30 per ton of carbon would generate $50 billion of
revenue per year.[11]