So, this is how I roughly understand the whole carbon credits thing is supposed to work. Am I right here? And does the real-world application work like this model, or is it rife with corruption, bureaucracy, and an inability to accomplish its stated goals like every other government project? Have their been any studies on the effectiveness of such a system?
The certification of carbon credits is taken very seriously and there are, according to the UNFCCC Parties & Observers, "Over 1,297 NGOs and 83 IGOs are admitted as observers." Further, carbon emissions especially from manufactures is fairly standard science. Fuel input + burn rate = carbon emission rate. The statistics are held not only on the scrubbers but the input valves as well. Also, it is reported by the fuel companies how much fuel they are selling and where it is being passed off. All this put together, along with thousands of NGO interests, allows the market to have enough watchdogs to prevent serious abuse. The key to carbon credits in the US is that you need a verification and certification process behind the carbon creditors. Again, NGO and even government regulation can go a long way towards certifying and making the market more transparent.
Real programs don't eat cache.