What is carbon trading?
Carbon trading is trading of emission rights, specifically the right to emit greenhouse gases.
Everything on earth has a carbon footprint, known as carbon dioxide (CO2). These emissions are released into the atmosphere when burning fuels like carbon, petroleum, and natural gas. Excessive CO2 emissions in the atmosphere accelerate climate change around the globe.
The idea behind carbon trading is that a company that produces pollution in the form of CO2 in the environment can purchase carbon credits from a company, project, or community that does the opposite, like developing solar panel projects or contribute to our nature reserves or other sustainable projects.
The purchase or sale of carbon credits happens between companies working on mitigating their carbon footprint. Although this market is relatively new, it is receiving more attention due to the legal and regulatory system applicable to these companies, which will continue to become more prominent.
These systems' objective is compliance with the Paris agreement to reduce CO2 worldwide.
Carbon Trading systems are already in place and know are in Europe and California. Other countries in Latin America, namely Colombia, Chile, and Mexico, also focus on the route to adopt similar systems. There are also examples of how the sale of carbon credits can benefit small islands like Mauritius and Fiji, which help generate revenues for their country.
Opportunities for Aruba
The Metabolic Foundation and its expertise in ecology will explore the possibilities for Aruba to be part of this market. The first phase is to investigate the amount of CO2 Aruba produces and its value in the current and future markets. They will also explore the process and requirements to sell carbon credits on the international market. The research trajectory will take one and a half months. Based on the research results, they will determine whether to move on with the process to sell carbon credits in a pilot project.