Carbon Credits Introduction
Carbon credits represent emission reductions. One credit equals one tonne of carbon dioxide either removed from the atmosphere or prevented from emitting.
Market Mechanisms
Carbon credits are traded in markets, enabling companies to buy credits to offset their emissions, effectively capping their environmental impact.
Types of Credits
There are two main types: voluntary credits, for organizations aiming to reduce their carbon footprint, and compliance credits, mandatory under cap-and-trade schemes.
Project Verification
Credits are generated from projects like reforestation or renewable energy. These projects must be verified for authenticity and effectiveness by third-party agencies.
Criticism and Complexity
Critics argue carbon credits may enable pollution perpetuation. Complexities arise in ensuring projects contribute to long-term sustainability and don't displace emissions elsewhere.Surprising Carbon Fact
Some carbon credits are generated from projects preventing cow burps, which significantly contribute to methane emissions, a potent greenhouse gas.
What is a carbon credit?
One tonne of CO2 offset
Half tonne of CO2 removed
Equivalent to one carbon tax
Company