I had a vague idea what the purpose of carbon credits was but thanks to the Sunday Telegraph, I now know how they work. In a nutshell it is as follows:

The British Government gives Barclay's Bank and JP Morgan £60 million. They keep £9 million for commission and with the £51 million they then buy carbon credits from India and China. On receipt of the money India and China then send a certificate to the United Nations saying how Indian and Chinese companies are now using less carbon than they were before. On receipt of a copy of the certificate the British Government then tells its own civil servants that they can happily keep the heating and lighting going in their offices because the energy they use is now, 'Offset.'

Result! British Taxpayers are £60 million pounds less well off but Indian and Chinese Companies £51 million better off. (less their government's handling fee). Barclays and JP Morgan are also better off and finally; the bureaucrats in Whitehall can leave their fires and lights burning whilst basking in the glow of the reflected glory of knowing that they are 'saving the planet.'

As the Meerkat says in the advert.  "Simple".

PS. Source of story EU Official Journal as quoted in the Sunday Telegraph P33 of today's date. 

I sort of knew that, and that is why my farming philosophy includes the restriction on selling carbon credits within the country of origin. The present system is a scam, but I do not know who actually ends up with the smaller amounts like when you pay to offset your carbon for an aeroplane flight.

 Does anyone know who or what organization audits the certificate issuing authority

Funny this carbon credit lark ? As only two months ago a doctor Wolfgang Knor at Bristol University of the department for earth sciences published a study report on the CO2 levels in the earth's atmosphere and as such gave a +/- 0.07% for any increases in the CO2. The report by the way was using dater that was started in 1850 to the present day so in plane english it means the our CO2 is the same as it was in 1850 when ( if we are to believe in globale warming ) we should have seen an increase in our CO2 levels to back up there theory the world is warming ?. Hmmm me thinks this is just another way to increase tax's.

 The whole carbon credit scam will make people such as American politician Rumsfeld millions in carbon trading, put more pressure on food production, and act as a platform for personal interest groups to promote their agendas, the veggie pressure groups led by "vinyl carbon polluter" Paul Mc Cartney are the most vocal at present.

http://www.holisticmanagement.org/n9/News/HM_in_the_news.php

Properly managed livestock are a positive not negative influence on the environment.

Holstein kid, The work was completed last year, published and a press release issued on 9 Nov 2009. I suggest you read more of what the research actually says and what Dr. Knorr himself says about the need to reduce carbon emissions. In plain English it does not mean that the CO2 level is the same as in 1850.

old mcdonald, yes read the report but impact is still 0 as mother nature is still absorbing CO2 even with the rain forests cut down, so as the Americans want to do is plant more trees to absorb CO2 in which case is then convereted back to oxygen as to 1850 the level is still the same despite more CO2 pumped into the atmsphere ?.

Holstein kid, No, the impact is not zero. Dr Knorr states that his work shows about 55% of released CO2 is taken up by carbon sinks and 45% is added to the atmosphere, just as it was in 1850, so that the carbon sinks are not failing to take up their historical percentage as some other observers have suggested might be the case. The difference is that it is estimated 2 billion tons (tonnes) of CO2 per annum were released in 1850 and 35 billion per annum at present. 45% of 2 is 0.9 and 45% of 35 is 15.75. 55% is of course more and, apart from the extra in the atmosphere, the extra billions of ton(ne)s in the sea may be having an effect on the pH levels and consequent problems for calcium formers in the food chain. Obviously this would impact all along the chain. Note I said "may" not "are" although some are already convinced it is "are".

If you really want to get involved in details then have a look at the Charlie Flindt thread (currently on P4 of Talking Point) and particularly the reference to Dr Knorr's work (P6 of that thread) posted under my name at 18.53 on 11th January.

Be careful too about the effect of plant life on absorbing CO2 (there is some discussion on that topic also in Charlie Flindt) because during the night some (perhaps 50%) of the CO2 absorbed during the day is released back to the atmosphere.