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Carbon markets are trading systems where carbon credits, representing the right to emit a certain amount of greenhouse gases, are bought and sold. These markets aim to reduce overall greenhouse gas emissions by putting a price on carbon and incentivizing reductions.
Compliance carbon markets are regulated by governments or international bodies and require entities to adhere to emission limits. Voluntary carbon markets, on the other hand, allow companies and individuals to purchase carbon credits to offset their emissions without regulatory mandates.
Carbon credits represent the right to emit a specific amount of greenhouse gases. Companies or individuals can buy these credits to offset their emissions. Each credit typically equals one metric ton of carbon dioxide or its equivalent in other greenhouse gases.
Carbon markets are important for climate change because they create financial incentives for reducing greenhouse gas emissions. By putting a price on carbon, these markets encourage businesses and individuals to adopt cleaner technologies and practices, ultimately helping to mitigate climate change.
