A carbon credit is an allowance or offset equal to one metric ton of carbon dioxide (C02) or other greenhouse gas (GHG) equivalent calculated in tons of C02. Carbon markets allow individuals, companies, or states to finance emissions reductions in other locations, for example, through projects that create or promote renewable energy, energy efficiency, or reforestation, as a means to lower their own carbon footprint. Trade of carbon credits within compliance and voluntary markets is a multibillion-dollar enterprise that makes up a cornerstone of international efforts to combat climate change. Buying and selling emissions allowances often means that mitigation can be achieved at lower costs.

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Copyright © 2011 Sage Publications, Inc. This chapter first appeared in Green Consumerism: An A-to-Z Guide.

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