Carbon Credits are part of the transferable permits system aimed at reducing greenhouse gas emissions. These add to the cost of polluters, along with environmental taxes. Unfortunately the prices are so low as to be ineffective.
The OECD (Organisation for Economic Co-operation and Development) report that the cost of polluting with 1 Tonne of CO2 is only £12. To put this in context, the average person in the UK is responsible for around 8 Tonnes of CO2 and has GDP of around £30,000.
OECD Secretary-General Angel Gurría says “Pricing carbon, through taxes or emissions trading systems, is one of the most effective tools for reducing CO2 emissions and tackling climate change. Prices can and do trigger reductions of energy use, improvements in energy efficiency and a shift towards cleaner forms of energy. The challenge is in getting the prices right.”