You wanted to know more about carbon trading, and Abyd Karmali, Managing Director and Global Head of Carbon Emissions at Merrill Lynch answered.
How will the current financial crisis affect the carbon market?
"For starters, kindly give the uninformed a simple definition of the term 'carbon trading'."
Ako Amdi, Nigeria
Karmali: "Carbon trading" has become jargon for "cap-and-trade system for reducing greenhouse gas emissions."
There are several concepts included here that need further explanation.
First, "greenhouse gases" refers to several gases recognized by scientists as enhancing the greenhouse effect. The most important of these in terms of their global contribution to climate change are carbon dioxide and methane.
"Cap" means the quantitative limit of emissions that is imposed by a regulator on a region, a country, a set of sectors, or a group of installations. The cap is usually ...