The Green Investment Corporation
Carbon Credits
What are Carbon Credits
Carbon Credits or Carbon Allowances is a generic term for any tradable certificate or permit representing the right to emit a set amount of carbon dioxide or the equivalent amount of a different greenhouse gas (CO2e). When a company buys a carbon credit, usually from the government, they gain permission to generate one ton of CO2 emissions. Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). Companies who end up with excess Carbon Credits can sell them to other companies who can use them to reduce their carbon footprint.
One carbon credit is equal to one ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Carbon trading is an application of an emissions trading approach. Greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners around the world.
There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company like ourselves that has aggregated the credits from individual projects.
Buyers and sellers can also use an exchange platform to trade, which is like a stock exchange for carbon credits. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Mechanism.
Carbon credits are issued by national or international governmental organizations. The Kyoto and Paris agreements created the first international carbon markets. The European Union's carbon credits traded from $7.78 to $25.19 averaging $16.21 per ton in 2018. Although it remains in development, it is anticipated that the value and trading of carbon credits will continue to grow particularly as several governments have committed to "green recoveries" following the COVID-19 pandemic recession.
We do not offer Carbon Credits, we do offer Carbon Offsets