The modern equivalent to medieval "indulgences"?

The modern equivalent to medieval "indulgences"?
Carbon Emissions Trading
What it all means (the condensed version)


Hi all!

Hope you've had a nice week.

A warm welcome to our new subscribers: John, Francesca, L-713, Rebecca, D+E, Kim, Sandeep, Paola, Nataly, Kanishka, Zuzi, Nayara, Alison, Kelly, Fi, Rachana and Sheila.

This newsletter tends to be a light-hearted take on interesting things in the world of sustainability. Today I'll be attempting to make the potentially dry subject of Carbon Emissions Trading an enjoyable and educative read. But don't worry: other weeks are decidedly more fun, such as the "Making Of A Bag" series, where I delve, step by step, into how I take the idea of a tote/backpack/pouch to an actual tote/backpack/pouch. Take a look at our newsletter archive for a whole array of subjects.

But now, let's jump into the world of carbon emissions trading. It's an enormous topic, so this will just be a whistle-stop introductory tour.

An image that should be confined to the annals of 19th century history. Should, being the key word.

Image: Patrick Hendry


Carbon (dioxide) emissions trading is a market-place system set up by the international community as a way of tackling climate change. The scheme is also known as Cap and Trade (CAT) and Emissions Trading Schemes (ETS). In essence, it's a way of putting a price on emitting carbon dioxide into the atmosphere (which leads to global warming).

Carbon emissions trading started with the 1997 Kyoto Protocol, which was signed by around 190 countries. The Kyoto Protocol placed specific targets on countries to reduce their carbon emissions: a 5% reduction between 2008 and 2012 compared to 1990 emissions levels.

Part of the Kyoto strategy was to create carbon credits equal to one tonne of CO2. Carbon credits could be traded internationally so that countries could offset their high emissions by purchasing credits from countries with lower emissions.

In 2013, the EU banned the purchase of credits except for the purchase of credits from the least developed countries.

The overall emissions trading system is being reconsidered in potential favour of a carbon tax.



Too right. Image: Li-An Lim

Carbon emissions trading schemes aid in reducing levels of carbon emissions by introducing a worldwide cap and the ability to track each tonne of CO2.

The businesses emitting carbon are essentially paying for their emissions.

The ability for developed nations to purchase carbon credits from developing nations facilitates investment into those nations and their local populations.

Some industries who do not have low-carbon alternatives are able to fund low-emission projects to offset the emissions they can’t reduce themselves.

The scheme provides an incentive for businesses to reduce their emissions, either to meet their quotas or to make profit from selling their allocated credits.


A Financial Times article likens carbon offsetting to the Catholic Church's selling of "indulgences" to reduce time in purgatory. Definitely worth a read.

There are large member states who have not ratified the Kyoto Protocol, including the United States (Clinton signed it, but the US Senate refused to ratify the Protocol). Canada also withdrew.

The ability for a higher-emission country to purchase carbon credits from a lower-emission country means that the higher-emission country does not make purposeful strides towards investing in and changing the flaws in their own production processes and consumption patterns.

With generous quotas afforded to some heavy polluters at the start, these companies have both been able to match historic production of carbon while making profit from selling credits.

Carbon credit trading concentrates carbon emissions and pollution in more developed countries.

Some of the heaviest carbon-emitting industries receive exemption for political reasons.

Further thoughts from an expert

The Green Generation Initiative, supported by Leaving A Legacy.

Nimisha Brahmbhatt is the co-founder of Leaving A Legacy - an organisation that funds environmental restoration & conservation projects. Nimisha is a self-taught expert on carbon offsetting.

Nimisha calls a spade a spade: carbon emissions schemes are a convenient way for a lot of countries / companies to put off taking meaningful action on climate change. She says that we're addicted to the concept of offsetting: it's a poisoned chalice and is simply masking the problem.

Nimisha highlights other issues, such as the fact that there is no genuinely independent body to regulate the carbon emissions industry. She acknowledges VERRA as a body that is good at the initial certification, but not great at longer term compliance. She is also concerned with greenwashing and the possibility of an emissions trading system collapse (like the 2008 crisis) whereby the system falls apart and we learn that nothing was offset!

She is also concerned by some claiming to offset a tonne of carbon for as little as £4, which she says is simply impossible. Other organisations she's seen charge 67€ to offset a tonne of carbon dioxide, which is more accurate in her opinion. Nimisha recommends NULA as an organisation doing good work in the offset space.


Like I said, carbon emissions and the associated trading system are a huge topic and of course the above has merely touched on a few aspects. Nevertheless I hope today's newsletter has been informative. My biggest takeaway has been the reminder that we truly need to change our habits if we want to help the planet.

A big thank you to Fiona and Nimisha, for your time and assistance to help me write today's newsletter. As I mentioned above, this 2019 Financial Times article on carbon offsetting is well worth a read.

Happy pondering,


LUXTRA Founder | Carbon Emissions Whizz* | Proud B Corp-er
*Er... of course I'm not, but I'm a lot more informed vs. last week!

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