Carbon Trading Market: Viability For Islamic Financial Industry

In response to global warming and growing emission levels countries have shown great concern to make efforts to reduce emissions. Under the Koyoto Protocol countries with higher level of emissions have developed a mechanism to buy credits from countries with low emissions. High levels of polluters are issued allowances by their national governments to cut down emission equal to the value of allowances issued. They are either to abate the emissions or to sell these allowances to companies or countries with low emissions, whichever is cheaper. The Emission Trading seems to be simple and a breakthrough in combating environmental problem but the mechanics of the trading are neither simple nor leading towards the right solution rather developed a trade scenario in which banks, derivative market players, speculators, brokers all are making their way to earn huge profits. This all is making the environmental problem worse. Alternate choices and methods are yet to be tested to run this trade w