P12–20 ETHICS PROBLEM The Environmental Protection Agency sometimes imposes pena
ID: 291119 • Letter: P
Question
P12–20 ETHICS PROBLEM The Environmental Protection Agency sometimes imposes penalties on firms that pollute the environment (see the Focus on Ethics box on page 481). But did you know that there is a legal market for pollution? A mechanism that has been developed to limit excessive air pollution is to use carbon credits. Carbon credits are a tradable permit scheme that allows businesses that cannot meet their greenhouse-gas-emissions limits to purchase carbon credits from businesses that are below their quota. By allowing credits to be bought and sold, a business for which reducing its emissions would be expensive or prohibitive can pay another business to make the reduction for it. Do you agree with this arrangement? How would you feel as an investor in a company that uses carbon credits to legally exceed its pollution limits?
Explanation / Answer
The carbon credits are the credits which has been obtained by the organizations for reducing its carbon-di-oxide emission or for removing the carbon-di-oxide foot print from the atmosphere. When an organization purchases a carbon credit a ton of carbon di oxide or green house emission will be removed from the atmosphere. Being environmentally conscious it is essential that all the organizations should consider their level of co2 emissions.? One company that make use of the carbon credits or purchases are the general motors. This organization is morally obligated to the environmental factors and has a mission to operate environment friendly. This arrangement can be agreeable to some extend as all organizations will emit a certain level of gren house emissions to the environment which can harm it. Through purchasing the carbon credit the organizations like GM is taking measures to reduce it carbon foot print. Being a investor it cannot be considered that the organization which purchase the carbon credit exceeds its pollution limit. Through purchasing these credits it is investing in making its emissions zero which highlights its responsibility towards the organization.
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