It's a complex procedure, but essentially, trading credits revolves around the theory that some practitioners will be better suited to reduce carbon emissions than others. "The things you do to reduce emissions should be rewarded," said Peter B. Clarke, project manager for ICF International in Toronto. By way of example, Clarke continued: "Two entities each emit 30 tons of CO-2. Regulators dictate that the production of emissions be reduced by 40 tons total. Entity B reduces emissions substantially, but Entity A is unable to do anything. Entity A can purchase emissions credit from B. B gets cash, A gets the allowance and emissions are reduced."
Despite the voodoo-economics sound of the concept, there are real income gains to be collected, said Paul MacGregor, an EVP with Neuwing Energy Ventures in Alpharetta, GA. While exact gains can vary, based on location and the efficiencies employed, "In the volunteer market, it can be $5 per kilowatt hour," he stated. "In areas with high CO-2 emissions, it could be three times that amount." Spread over the breadth of a portfolio, the trades can multiply into sizable income gains.
The currency of sale here are Green and White Tags, certifications, essentially, from regulatory bodies that the savings are real and accurate. The color codes represent the type of greening application employed, such as lighting or solar panels.
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