Is a carbon credit trading solution to low emissions? Is it our green light on fighting climate change?

Carbon credit

Is a permit which allows a country or organization to produce a certain amount of carbon emissions and which can be traded if the full allowance is not used.

It is also known as a carbon offset, which simply implies to be a 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.

It’s like barter trade between the greenhouse gases emitters and those with carbon credits. The credits are exchanged for the emissions they cancel out.

How do you create carbon credit?

If you are emitting less than your capped limit, you may sell your unused credits to another person that is exceeding their limit.

Basically, all you need to do is offset your own carbon emissions and surplus. The surplus is what you sell and benefit from.

Planting trees, embracing clean energy, reducing zero food waste, are some practices that help to offset the carbon emissions.

Carbon credit trade

Is a market that trades greenhouse gases emissions under cap and trade schemes or with credits that pay for or offset greenhouse gases reduction.

It is a market based tool aimed to limit the greenhouses gases emissions.

The company that emits greenhouse gases and have no carbon offset plan are required to purchase carbon credit or be penalized.

How are carbon credits calculated?

There are two ways of calculating it.

Either via the Clean Development Mechanism as suggested at the Kyoto protocol, or through Voluntary Carbon Market.

In a nut shell

Organizations, governments, individuals and any interested parties, may work on a way that reduces greenhouses emissions. Able to offset what carbon they are producing and still be able to offset for others. Through which they can earn.

Those who are emitting these greenhouse gases are made to buy credits enough to offset their emissions.

Those who are already working towards reducing their emissions are able to earn from the extra credits.

Unlike carbon tax, its a win-win situation here.


Carbon credit trading helps people enjoy benefits from practicing activities that produce low emissions.

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