What Are Carbon Credits?
Let’s simplify Carbon Credits for you
Imagine the Earth as a big balance scale. On one side, we have all the activities that add carbon dioxide (CO2) to the atmosphere, like driving cars, flying planes, and manufacturing products. On the other side, we have activities that remove CO2 from the atmosphere, like planting trees and using renewable energy.
Carbon Credits are like coupons that help balance this scale. Here’s how they work:
- Carbon Emissions: When businesses and individuals do activities that release CO2, they create a certain amount of emissions.
- Carbon Reduction Projects: There are special projects designed to reduce or remove CO2 from the atmosphere. These projects can include things like:
- Planting forests
- Building wind farms
- Creating efficient energy systems
- Protecting natural ecosystems
Issuing Carbon Credits: These projects are verified and awarded carbon credits based on how much CO2 they reduce or remove. One carbon credit usually represents one metric ton of CO2 that has been reduced or removed.
Buying Carbon Credits: Companies and individuals who want to offset their own carbon emissions can buy these credits. For example, if a company emits 100 metric tons of CO2, they can buy 100 carbon credits to balance out their impact.