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Brooklyn Design

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We love Brooklyn

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What are carbon credits and how do they work?

Carbon credits are a type of permit that allows individuals or businesses to emit a certain amount of carbon dioxide (CO2). These carbon credits were conceptualized during the 1997 Kyoto protocol climate change meeting, where global leaders agreed on a system to help reduce greenhouse gas emissions. One carbon credit permits the emission of one ton of carbon dioxide or the equivalent of other greenhouse gases. Carbon credits allow the owner to emit a certain amount of carbon dioxide.

The goal of having a carbon credits system, where extra emissions of it will need additional credits, will motivate businesses to reduce their emissions. Carbon credits are one way that individuals and companies can be held accountable for their emissions. The theory behind carbon credits is that companies and countries that pollute the most should pay for the privilege of doing so.

Carbon credits trading explained

Carbon credits can be bought and sold on carbon credits markets, and the prices are determined by supply and demand. The cost of a carbon credit reflects the cost of reducing or preventing a ton of carbon dioxide emissions.

Carbon credits trading is another way to help reduce emissions by establishing a market for buying and selling emission permits. When a company cannot reduce its CO2 emissions, it can buy a carbon credit from another entity. This will, in turn, help create more new investments into green technology and carbon offset projects. In this way, those who pollute can pay and those who don’t pollute will be financially rewarded.

What is the meaning of carbon offsetting?

Carbon dioxide, the most common greenhouse gas, is released when fossil fuels are burned for energy. Carbon offsets represent a way of reducing these emissions by compensating for them elsewhere.

Carbon offsets can be used to reduce greenhouse gas emissions in several ways. This can range from projects that planting trees, investing in renewable energy or improving industrial processes. One carbon offset equals one metric ton of carbon dioxide. For example, an offset might be generated by investing in a project that reduces emissions by one metric ton.

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