Buying and Selling Debts — To the Environment?!

Not one of us has not heard about the decaying environment. The countries with the smallest “carbon footprint” are regarded as better, regardless of how large their environmental sector is. While the commonly held belief is that consumer use of exhaustible natural resources, it is not so; it is primarily manufacturing industries that are responsible for carbon emissions, though we try to deal with each class of users regarding preserving the environment. Continue reading to learn more about the Laws Surrounding Carbon Credits.

 

For consumer use of exhaustible natural resources, we try to mitigate carbon emissions in several ways. The most obvious of which is taxation. Taxing excessive use of resources which produce carbon emissions is an effective way of limiting those emissions.

 

In the case of producers, we can take the example of a car manufacturer. A car manufacturer has an obligation to ensure that their product limits carbon emissions within a certain limit. Not long ago, this was the cause of scandal within Volkswagen. Cheating the carbon emission standards was deemed not only illegal but unethical. Environmental preservation is considered unethical for its transgenerational impact. We oft hear the effects that our actions will have on future generations, and the topic has presented heavily at international conferences, like the Paris Conference, and features heavily in United Nations treaties on the use of exhaustible and non-exhaustible resources, including groundwater.

 

While the car manufacturer is legally obliged to ensure their products are within the appropriate limits, they also have limits on the amount of carbon emissions they are entitled to produce. Corporations are entitled to a number of “carbon credits” depending on a broad range of considerations. However, once a company has been allotted its carbon credits, that corporation is entitled to do what it likes with them. What this means, often, is that unused carbon credits are sold to other corporations who have, for whatever reason(s), the incentive to emit more carbon. The concept is simple: if the net harm has been regulated, those who are components of the sum can do what they like, as long as the net amount is unaffected.

If the carbon emissions allotted to the corporation are surpassed, that company is liable to pay taxes as required by the relevant jurisdictions. Given the serious weight we have given environmental issues since the 70s, these taxes are necessarily high, and incurring these taxes is vastly damaging to the reputation of violators.

 

For all of the above-mentioned reasons, it is integral for corporations acting in any number of jurisdictions to ensure that their policies, and usage, are up to snuff.

 

Read more about Environmental Law and Shipping and Maritime Law with our team of top lawyers in UAE.

 

 

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