Carbon exchanges are the vehicle of this task.Ĭarbon trading is also called carbon emissions trading.

Together, they form a market-based system aimed at reducing CO2 emissions that cause global warming.

Some of these credits are permits that allow a company or other entity to emit CO2, and some of these credits represent one ton of CO2 emissions that’s already been offset. What is Carbon Trading?Ĭarbon trading is the process of buying and selling carbon credits. And if you’re wondering which exchanges those are, we’re going to identify the top 4 carbon credit exchanges for 2022.īut before that, we’ll first define what carbon trading is, and then explain the two different carbon markets in place. Individuals and companies alike on both sides of the market are looking for the top carbon exchanges to trade carbon credits. On the other hand, companies with negative emissions that actively reduce the amount of carbon in the atmosphere (like reforestation projects) instead create carbon credits and sell them. So, when an entity buys a carbon credit, it can now offset one ton of its own CO2 emissions.Each credit equals one ton of CO2 equivalent (CO2e). It’s all happening for a simple reason: Reducing carbon emissions is a global initiative and the carbon market offers great options for entities looking to cut emissions.Ī polluter can purchase credits to cover the emissions they release into the air. Carbon trading has become extremely popular today among individuals and organizations and carbon exchanges are starting to emerge.

Icfa credit exchange program