Carbon Exchange 2025: How It Works, List of World Exchanges, and How to Calculate Carbon Emissions

Bittime - In the face of global climate change, carbon exchanges are now one of the most important innovations supporting a green economy. Through carbon trading systems, companies can buy and sell CO₂ emission rights, creating a market mechanism that efficiently encourages greenhouse gas reductions.

This article will discuss what a carbon exchange is, how to calculate carbon, and a list of global carbon exchanges that play an active role in reducing global emissions.

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Definition and Mechanism of Carbon Exchange

Source:MarkPlus Institute

The carbon exchange is a market where carbon is bought and sold.carbon credits, permitswhich represents a reduction of one ton of carbon dioxide (CO₂) or other greenhouse gas emissions.

The mechanism works on a simple principle:

• The government or agency sets an emission limit (cap).
• Companies that are able to reduce emissions below this limit can sell the excess in the form of carbon credits.
• Conversely, companies that exceed the limit must purchase credit from other parties to remain compliant with regulations.

This system creates economic incentives for emissions reductions, while strengthening transparency and accountability in global climate action.

World Carbon Exchange List

Here are some of the most active carbon exchanges globally:

• EU Emission Trading Scheme (EU ETS)– Europe
  The world's largest carbon exchange covering the heavy industry and energy sectors.
• California Carbon Market (CCM) - United States of America
  Regulate emissions in the transportation and utilities sectors, with the highest carbon credit prices in the world.
• Regional Greenhouse Gas Initiative (RGGI)– Northeast America
  Focus on power generation with a carbon credit auction system.
• China National ETS– China
  The largest carbon trading program by emissions volume, covering more than 2,000 companies.
• Indonesia Carbon Exchange (IDXCarbon) - Indonesia
  Inaugurated in 2023, IDXCarbon is a major step in integrating the national carbon market to supportnet zero emission 2060.

How to Calculate Carbon

Calculating carbon emissions is crucial for companies and individuals to understand how much their activities contribute to climate change. Here are the simple steps:

1. Identification of emission sources
   For example: electricity use, transportation, industrial production, or household activities.
2. Use the emission factor (Emission Factor)
   This factor indicates the amount of CO₂ produced from a given unit of activity. For example, 1 liter of gasoline produces approximately 2.3 kg of CO₂.
3. Multiply the total activity by the emission factor.
   Basic formula:
   Carbon Emission (kg CO₂)=Activity (liters/kWh)×Emission Factor
4. Convert results to tons of CO₂
   1 ton = 1,000 kg. This value can be used to determine the number of carbon credits required.

Nowadays, there are many online calculators such as the Carbon Footprint Calculator or the GHG Protocol Tool that make this process easier.

Benefits of Carbon Exchanges for a Green Economy

• Driving Clean Energy Innovation
  Companies are racing to adopt environmentally friendly technologies to reduce the cost of carbon credits.
• Improving Transparency and Accountability
  Every carbon credit transaction is verified and recorded in a digital system, preventing data manipulation.
• Supporting the 2060 Net Zero Emission Goal
  Through a carbon exchange, Indonesia can attract sustainable investment from the private and global sectors.
• Creating New Investment Opportunities
  Investors can profit from the increasing value of carbon credits as market demand increases.

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Conclusion

Carbon exchanges are not just economic instruments, but alsostrategic tools in fighting for planetary sustainabilityBy understanding how to calculate carbon and recognizing the various global carbon exchanges, the public and industry can actively participate in reducing their emissions footprint.

Amid the global energy transition, carbon exchanges provide a bridge between environmental responsibility and green economic opportunities.

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FAQ

What is a carbon exchange?

A carbon exchange is a market for trading emission permits or carbon credits to reduce greenhouse gases.

How to calculate carbon emissions?

By multiplying the amount of activity (such as electricity or fuel use) by the appropriate emission factor.

What are the largest carbon exchanges in the world?

EU ETS, California Carbon Market, China ETS, and IDXCarbon in Indonesia.

Can carbon exchanges be an investment?

Yes, carbon credits have economic value that can be traded like green investment assets.

What are the main benefits of carbon exchanges for the environment?

Reducing global emissions while encouraging the use of clean energy sustainably.