One carbon credit is equal to one tonne of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Carbon trading is an international attempt at the reduction of carbon emissions utilizing a free market over the counter approach. Carbon credits are issued in two markets, industrial and agricultural. Industrial carbon credit offsets are generated by businesses that use methods of operation to generate electricity in ways that do not make use of fossil fuel. Examples of these businesses include solar fields, wind farms, nuclear and hydro power. Agricultural carbon offsets are created in businesses that foster the ingestion of green house gases. Examples of agricultural processes that generate carbon credits are the prevention of rain forest deforestation (R.E.D.D. credits), replanting trees and plant matter where clear cutting has occurred and recycling of organic waste through microbial digesters or advanced composting methods.
Become Carbon Neutral for $8.99 per Metric Ton
Carbon credits are actively traded and exchanged. In the last few years over five billion dollars of credits have changed hands and the momentum of this business is increasing. Companies that are natural consumers of fossil fuels in the operation of their business (airlines, shipping, manufacturing and trucking) are purchasing these credits to "offset" their carbon production from the producers of them. While the primary focus of the offset market has been for large and small businesses to become carbon neutral to date, there is a growing movement for individuals to participate in this market.
Carbon credits and carbon markets are a component of national and international attempt to mitigate the growth in concentrations of greenhouse gases (GHGs)