Carbon credits represent a tradable permit or certificate that gives the holder the right to emit a specific amount of carbon dioxide or other greenhouse gases. They are created to offset greenhouse gas emissions and encourage investment in renewable energy and energy efficiency projects. Transactions involving carbon credits facilitate the buying and selling of these permits, enabling organizations and individuals to manage their carbon footprint and contribute to climate change mitigation.
Carbon credits play a crucial role in promoting sustainable practices and combating climate change. They provide financial incentives for reducing emissions, supporting the development of low-carbon technologies, and fostering a transition towards a greener economy. By creating a market for carbon, they encourage businesses and governments to take responsibility for their carbon emissions and actively work towards reducing them.