In the book, The New Economy of Nature, the authors Gretchen C. Daily and Katherine Ellison give a detailed history of the evolution of carbon credits in chapter 2 titled : How to Make Carbon Charismatic. David Brand was a Canadian Forester who played a key role in starting the worlds first carbon rights. He did this because he wanted to offset carbon emissions which is know as a major contributor of global warming. These rights can be bought or sold just like any other forestry, timber, or grazing rights. .
In 1997 representatives form industrial countries met in Kyoto, Japan for the Kyoto Protocol and agreed to cut greenhouse gas emissions to the 1990 levels by the year 2012. For the United States this means that they must now lower its rates by as little as 7%. Legislation for carbon credits in the United States was approved in 1998. .
` Major U.S. Companies that had once dismissed the idea of global warming were now becoming concerned and purchasing carbon credits. The biggest climate change since the legislation was passed happened in 1999. The Tokyo electric power company was the worlds largest power firm. It had signed up for the carbon rights from new pine and eucalyptus forest. These forests were expected to absorb 200 000 to 800 000 metric tons of co2 per year. At the time, Australia, California, and Latin America were competing to sell carbon credits. California was trying to sell its redwood forest: redwood trees are known to store more carbon, grow taller, and live longer than most other trees making it worth more credits. The competition between nations over carbon credits led to the term charismatic carbon. .
Farmers living in the United States were also trying to sell carbon credits because of the falling commodity prices which left them desprate for aid. A group of energy companies in British Columbia paid these Iowa farmers a few dollars per acer per year to reduce plowing on 2.