What Is A Carbon Credit?
A Carbon credit (often called a carbon offset) is a government issued environmental credit for greenhouse emissions reduced or removed from the atmosphere from an emission reduction project, which can be used by governments, industry or private individuals to compensate for the emissions they are generating.
Carbon credits are typically measured in tons of CO2-equivalents (or CO2e) and are bought and sold through a number of international brokers, online retailers and trading platforms. Businesses that find it hard to comply with the carbon emissions, purchase carbon credits to offset their emissions by making finance readily available to renewable energy projects, forest protection and reforestation projects around the world. These renewable energy and energy efficiency projects replace fossil fuel and industrial processes. Their value depends on how much carbon a tree captures.