A carbon credit is a certificate or permit which allows a country or organization to produce a set amount (usually 1 tonne) of carbon dioxide emissions (or equivalent mass of another greenhouse gas) which can be traded if the full allowance is not used. Sound confusing? Let's break it down.
Each participating country of the Kyoto Protocol was assigned a quota for greenhouse gas emissions. This amount is broken down into individual units, with each unit allowing the emission of 1 metric tonne of carbon dioxide or equivalent greenhouse gas. Within each country, these units were distributed among operators, establishing a quota or cap for each organization. Operators with unused units would be allowed to sell them, as carbon credits, to organizations that exceeded their carbon emissions quota. If an Operator has used up all their carbon credits they can buy additional credits to avoid being fined for their carbon emissions. This is a cap-and-trade scheme.
The implementation of carbon credits has effectively put a price on greenhouse gas emissions. The market price of carbon credits varies with the balance of supply and demand. Operators would need to include the purchase of carbon credits as part of their internal cost. In order to reduce this cost and ensure that additional credits are not needed, organizations would be required to modify their processes to produce less carbon dioxide or find alternative means to keep their greenhouse gas emissions to a minimum.
The CERM Project is a collaboration between academic institutions, The University of the West Indies (UWI) and The University of Trinidad & Tobago (UTT), and Government Energy Institutions - the Ministry of Energy and Energy Industries (MEEI), PETROTRIN and the National Gas Company (NGC) toward sustainable development of known oil reserves using Carbon Dioxide Enhanced Oil Recovery.