carbon credit markets

Carbon credit markets are systems where companies can buy and sell allowances for emitting a certain amount of carbon dioxide. Governments or organizations set a cap on total emissions and issue credits accordingly. If a company emits less than its allowance, it can sell surplus credits to others that exceed their limits. This creates an economic incentive to reduce emissions, encouraging overall environmental responsibility. The market helps allocate emission reductions efficiently and supports initiatives for cleaner technologies, aiming to combat climate change through flexible, market-based solutions.