Carbon credit

A carbon credit can be used for trading in the carbon market. One carbon credit consists of one ton of CO2 (or sometimes CO2 equivalent gases).

Organisations, companies and individuals are allowed to purchase carbon credits in order to meet their goals or even voluntarily endorse lower emission. This is referred to as carbon offsetting. As emitting greenhouse gases then cost money, companies etc. will try to cut their emissions. This essentially means that carbon credits help regulate CO2 emissions.