Carbon Credit


Carbon Credit
A permit that allows the holder to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their green house gases below their emission quota. Carbon credits can be traded in the international market at their current market price.

The carbon credit system was ratified in conjunction with the Kyoto Protocol. Its goal is to stop the increase of carbon dioxide emissions.

For example, if an environmentalist group plants enough trees to reduce emissions by one ton, the group will be awarded a credit. If a steel producer has an emissions quota of 10 tons, but is expecting to produce 11 tons, it could purchase this carbon credit from the environmental group. The carbon credit system looks to reduce emissions by having countries honor their emission quotas and offer incentives for being below them.


Investment dictionary. . 2012.

Look at other dictionaries:

  • carbon credit — noun A unit, representing part of a country s or organization s total allowance for the emission of carbon dioxide, which may be traded to another country or organization if the full allowance is not used • • • Main Entry: ↑carbon …   Useful english dictionary

  • carbon credit — n. A tradable permit giving its holder the right to emit a specified amount of carbon dioxide. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008 …   Law dictionary

  • Carbon credit — This article deals with carbon credits for international trading. For carbon credits for individuals, see personal carbon trading. For voluntary schemes, see carbon offset. Part of a series on …   Wikipedia

  • carbon credit — A credit to emit a Tonne of carbon dioxide (CO2) issued as part of an emissions trading scheme such as the European Emissions Trading Scheme. Exchange Handbook Glossary * * * carbon credit ˈcarbon ˌcredit noun [countable] COMMERCE a fixed amount… …   Financial and business terms

  • carbon credit — /kabən ˈkrɛdət/ (say kahbuhn kredit) noun a credit earned within the carbon tax system for decreasing carbon dioxide in the atmosphere, as by planting forests, etc. The notion of a carbon credit is what is created when the equivalent of one… …   Australian English dictionary

  • carbon credit — carbon credits N COUNT: usu pl Carbon credits are an allowance that certain companies have, permitting them to burn a certain amount of fossil fuels. By investing in efficient plant it could generate lots of valuable carbon credits to sell to… …   English dictionary

  • carbon credit — noun A certified carbon dioxide emission displacement credit, supposed to be equal to one tonne of CO2 removed from the environment …   Wiktionary

  • Carbon dioxide — Carbon dioxide …   Wikipedia

  • Carbon neutrality — Carbon neutral redirects here. For other uses, see Carbon neutral (disambiguation). Part of a series on Green economics …   Wikipedia

  • Carbon dioxide equivalent — (CDE) and Equivalent carbon dioxide (or CO2) are two related but distinct measures for describing how much global warming a given type and amount of greenhouse gas may cause, using the functionally equivalent amount or concentration of carbon… …   Wikipedia


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