Regarding "carbon credits", which one of the following statements is not correct?
A
The carbon credit system was ratified in conjunction with the Kyoto Protocol
B
Carbon credits are awarded to countries or groups that have reduced greenhouse gases below their emission quota
C
The goal of the carbon credit system is to limit the increase of carbon dioxide emission
D
Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme
Correct Answer: Option D
Explanation
1. Statement (A) is correct: The mechanisms that generate carbon credits, such as the Clean Development Mechanism (CDM) and Joint Implementation (JI), were established under the Kyoto Protocol, which was ratified by signatory countries.
2. Statement (B) is correct: Under systems like cap-and-trade or mechanisms like CDM/JI, entities (countries or groups) that reduce their greenhouse gas emissions below a certain baseline or quota can be awarded carbon credits.
3. Statement (C) is correct: The fundamental goal of the carbon credit system is to create economic incentives for reducing greenhouse gas emissions, thereby helping to limit the increase of carbon dioxide and other greenhouse gas emissions globally.
4. Statement (D) is incorrect: Carbon credits are traded in various carbon markets (both compliance and voluntary). Their price is determined by market forces of supply and demand, not fixed by the United Nations Environment Programme (UNEP) or any single body.