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Carbon Credit

What is Carbon Credit?

Carbon credits are licenses that provide owners the right to emit a specific quantity of greenhouse gases, such as carbon dioxide. It's additionally referred to as a carbon offset.

The reduction of greenhouse gas emissions into the atmosphere is the ultimate purpose of carbon credits. As stated, the right to emit greenhouse gases equal to one ton of carbon dioxide is represented by a carbon credit. In terms of carbon dioxide emissions, that is equivalent to driving 2,400 miles, according to the Environmental Defense Fund.

Depending on the place and market where they are exchanged, carbon credits have varying pricing. The average cost of carbon credits in 2019 was $4.33 per tonne. During the first eight months of the next year, this price averaged $4.73 per ton after rising as high as $5.60 per ton in 2020.