FAQ
What are pollution allowances?
These are instruments usually issued by a regulatory
authority that allow a regulated entity to emit one unit of a
particular air pollutant. For example, the US EPA issues SO2 emission allowances that allow a regulated company, such as a coal-fired powerplant, to release SO2 in units of one ton.
What are reductions or reduction credits?
In the US we only have voluntary carbon markets for CO2 because we did not sign onto to the Kyoto Protocol. These credits can be issued to a company that has made permanent and certifiable reductions in greenhouse gas emissions through energy savings, manufacturing process changes, carbon sequestration, fuel switching, etc. These credits can then be sold to other companies or individuals that wish to reduce their own carbon footprints.
