A carbon credit is a tradable certificate representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tC02e), equivalent to one tonne of carbon dioxide. It is an emission trading approach which was ratified in conjunction with the Kyoto Protocol. It allows market mechanisms to encourage industrial and commercial processes in the direction of low emissions. Carbon 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.
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