The definition of Carbon Finance
is a new branch of Environmental finance. Carbon finance explores the financial implications of living in a carbon-constrained world, a world in which emissions of carbon dioxide and other greenhouse gases (GHGs) carry a price.
Financial risks and opportunities impact corporate balance sheets, and market-based instruments are capable of transferring environmental risk and achieving environmental objectives. Issues regarding climate change and GHG emissions must be addressed as part of strategic management decision-making.
The general term is applied to investments in GHG emission reduction projects and the creation (origination) of financial instruments that are tradeable on the carbon market.
The Kyoto protocol and carbon offset
The production of greenhouse gases in the atmosphere due to human activities (energy, industry, land and air transport, heating, agriculture), promotes global warming which has serious consequences for our ecosystem.
is one of a number of instruments at our disposal to fight against global warming and protect our environment.
When it is not possible to reduce our emissions,offsetting allows us to keep carbon neutral. Offsetting can be made possible by funding projects such as ID’s, which reduce the emissions of CO2 into the atmosphere