What is a carbon credit?

The greater the gas emission reductions in tons of CO, the greater the number of carbon credits obtained for trading.



The carbon credit market emerged in 1997, after the signing of the Kyoto Protocol. The international agreement established that, between 2008 and 2012, developed countries should reduce, on average, 5.2% of their emissions compared to the levels observed in the 1990s.


In addition, the Protocol also created the Clean Development Mechanism (CDM), with the objective of enabling the quantities of GHGs not emitted or reduced to be traded later in the market.


Through the CDM, it was established that countries that reach their emission reduction targets should receive Certified Emission Reductions (CERs), generating a carbon credit that can be traded directly in the market.


In this way, countries that are unable (or unwilling) to reduce their greenhouse gas emissions will be able to buy carbon credits and use them to meet their own target.


To make it possible to trade carbon credits in the market, it was necessary to institute a way to calculate emission reductions and the monetary value of the credits available for trading.


Thus, it was established by convention that one ton of CO₂ is equivalent to one carbon credit (tCO₂e).

For each ton reduced, a certificate is issued that can be traded as a carbon credit in the market.


Therefore, the greater the gas emission reductions in tons of CO₂, the greater the number of carbon credits obtained for trading.

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