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• Electricity companies are allocated less carbon credits than they need, in order to encourage investment in environmentally-friendly power generation.
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The Climate Trust is a group that buys and sells carbon credits.
»Companies unable to meet their emissions targets would be able to purchase additional carbon credits.
The carbon credit system was ratified in conjunction with the Kyoto Protocol. Its goal is to stop the increase of carbon dioxide emissions.
For example, if an environmentalist group plants enough trees to reduce emissions by one ton, the group will be awarded a credit. If a steel producer has an emissions quota of 10 tons, but is expecting to produce 11 tons, it could purchase this carbon credit from the environmental group. The carbon credit system looks to reduce emissions by having countries honor their emission quotas and offer incentives for being below them.