Value of carbon credits
Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air such as carbon emitted by burning of fossil fuels. This means that carbon becomes a cost of business and is seen like other inputs such as raw materials or labor.
Carbon credits are measured in tonnes of carbon dioxide.
1 credit = 1 tonne of CO2.
Each carbon credit represents one metric ton of C02 either removed from the atmosphere or saved from being emitted. The carbon credit market creates a monetary value for carbon credits and allows the credits to be traded.
For each tonne of carbon dioxide that is saved or sequestered carbon credit producers may sell one carbon credit.