What are carbon credits
- A carbon credit is a permit that allows the company that holds it to emit a certain amount of carbon dioxide or other greenhouse gases.
- One carbon credit is equal to one ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases.
- How does one earn a carbon credit? An organisation which produces one tonne less of carbon or carbon dioxide equivalent than the standard level of carbon emission allowed for its outfit or activity, earns a carbon credit.
Example: Suppose a cement plant is allowed to emit 1,000 tonnes of CO2 a year. If cleaner kilns bring it down to 900 tonnes, it earns 100 carbon credits, which it can sell to a company that is over its limit.



