However, if you wish to reduce your carbon footprint using the voluntary market, the credits you buy will likely involve carbon offsetting efforts. The terms can be confusing to people who aren't in the thick of the compliance market. When a carbon offsetting project monetizes its efforts in the voluntary carbon market, it's typically referred to as generating a voluntary carbon credit. On the other hand, carbon offsets are traded on the voluntary market and include carbon sequestering efforts, renewable energy, and other projects that remove greenhouse gasses from the atmosphere.Īlthough carbon offsets and carbon credits are different, the terms often are used interchangeably. Companies exceeding their allowances must buy new credits to increase their cap. Carbon credits are typically associated with cap-and-trade systems in which governments limit the carbon emissions that specific industries can release. In this article, we'll look at the issue of carbon offset vs carbon credit while explaining how they work and examining their importance.Ĭarbon credits generally represent a reduction in greenhouse gas emissions, whereas carbon offsets can represent greenhouse gas removal. Carbon credits and carbon offsets are among the many techniques created to counteract global climate change. People have organized to develop methods for mitigating the threat posed by climate change. According to the Environmental Protection Agency, climate change impacts our oceans and weather, heat-related death rates, wildfires, and much more.
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