Most discussions in “Environmental Economics” surround the need to subsidize Alternative Energy Firms, “Invest” in Environmental-focused Non-Governmental Organizations, and “Carbon Credits”.
I have heard of “Carbon Credits” described as a “pay to pollute” or a “Carbon Tax”?
How exactly would this work?
Won’t allowing the buying,selling, and trading of “Carbon Credits” create a new Asset Class that Firms can use to leverage themselves.
I am thinking of a scenario where a company buy 100 units of Carbon Credits. The EPA determines that they did 100 units of pollution. The Company can then avoid paying out a Class Action Lawsuit by claiming to be “Carbon Neutral” or a “Non Polluter”.
Could this turn Carbon Credits into “Polluter’s Insurance”?
