Carbon Credit Trading
What is carbon credit trading?
Carbon trading is the buying and selling of emission permits or allowances between liable parties or other market participants.
Governments are putting in place emission trading schemes as number of companies will have a liability and each year they will have to surrender certain number of credits. If a company is more efficient they will be able to sell some of their credit in to the market and if a company is less efficient they will potentially have to source and buy more carbon credits.
The carbon bit of carbon trading: one carbon credit represents one tonne of carbon dioxide equivalent. Carbon credit trading works like in any other commodity market and is basically buying and selling of carbon units between market participants.