• The idea of carbon credits is supposed to reduce global carbon emissions.Mike Kemp Images/Photodisc/Getty Images
  
  When carbon credits were first introduced, many people saw them as a win-win situation. Under the carbon credit system, personal accountability was taken out of the carbon footprint equation. Instead of businesses working to reduce their own carbon emissions, they could pay another business to reduce their emissions. But the world is learning that the carbon credit schemes may not be such a positive idea, leading only to complex and dubious credit-trading schemes that have little positive impact on reducing global carbon emissions.
  
  

Discourages Long-Term Solutions

• The ability to trade carbon credits isn't conducive to coming up with long-term solutions to reducing carbon emissions. Any actions taken now to reduce emissions may take a long time to have a noticeable effect. Current solutions will impact emissions 10, 20 or 50 years into the future. This means that if a business trades money to gain more carbon credits, that business will be able to maintain or even increase its level of carbon emissions, while the anticipated reduction that is supposed to offset its emissions may be years in coming.
  
  Under this scheme, far from reducing carbon emissions, the system of carbon credits can lead to an overall increase in carbon emissions, speeding rather than slowing global warming and depleting fossil fuel reserves further.
  
  

Volatile Trading Market

• The market for trading carbon credits is also a volatile one. The European Union's carbon-trading scheme issued so many permits between 2005 and 2007 that the market was flooded, with the result that carbon prices bottomed out. This removed the incentive for companies to trade their credits.
  
  

Dishonest Trading

• The fast-growing carbon-trading market has been mostly unregulated in its history, as of 2010. Some offset firms in the United States and elsewhere have been caught selling carbon credits for normal operations that do not actually take any additional C02 out of the atmosphere, such as pumping C02 into oil wells to force out the remaining crude oil.
  
  Standards must be developed to regulate the market and verify that offsetting projects go beyond normal operations and have a real environmental value. Regulations must also be set to define terms such as "carbon-neutral" and determine who can use offsets.