All have heard of asset allocation, what are carbon assets?

Partners who have had financial experience should have heard of assets for allocation. The so-called assets, literally understand the problem is the social capital and industry, further understanding of the ability to understand is a productive means of living,Carbon offset can improve the production of information. So money may not be equal to assets, unless this money lying in the savings account, get the right investment, the funds will be converted to realize the assets, become a productive force that we can develop to create economic value.

So what is a carbon asset? In this case, carbon is the right to emit carbon dioxide, so a carbon asset is the right to emit carbon dioxide that can be used as a means to create value for a business. So why is it that greenhouse gases, mainly carbon dioxide,emissions free which used to be emitted from the production activities of enterprises, have now become means of production? In the face of the serious challenge of global warming, countries around the world have formulated emission reduction targets and implementation plans, and the implementation of carbon quota system by the government is one of the main ways.

Carbon quota is the amount of greenhouse gases that the state forces enterprises to limit each year, similar to the credit card limit we use for daily consumption. Within the limit, we can overdraft and emit greenhouse gases.sustainable shipping During the performance period at the end of each year, enterprises can fulfill the performance of carbon emission quotas through the state's non-reimbursable repayment or enterprises' reimbursable repayment. Under such a carbon quota system, enterprises have to incorporate carbon emissions from production and operation activities into their daily operating costs, so that carbon assets are regarded as a kind of virtual means of production and costs need to be paid to repay their carbon emission quotas. Therefore, how to reduce the cost of carbon emission reduction and maximize the benefits of carbon emission reduction through carbon asset management has become an important issue for the future sustainable development of enterprises.

So how can enterprises repay their carbon credits? Enterprises can reduce their own carbon emissions through their own technological improvements or emission reduction activities, thus generating a surplus of carbon allowances. Junior partners who understand the industry and finance should know that commodities have investment value as one of the mainstream assets in the market. Carbon assets, like commodities, have the attributes of tradable commodities and assets. Buyers, such as emission control companies, can purchase surplus carbon allowances from sellers on carbon trading venues to offset their overdrafts and thus achieve their zero carbon goals. At the same time, through market-based carbon trading instruments, the flow of carbon assets in the capital market is promoted, so that companies and projects have good carbon reduction behavior.

In addition to carbon quotas, carbon assets also include carbon offsets. Carbon offset, also known as carbon credit or voluntary carbon emission reduction project, is a non-mandatory carbon emission reduction ranking different from carbon quota. Enterprises reduce or absorb carbon emissions through voluntary participation in carbon emission reduction activities, thus indirectly helping other carbon emitting enterprises to compensate for their carbon emission quotas, while voluntary emission reduction enterprises receive certain market-based financial subsidies from them.