Carbon markets are a way for companies to buy and sell carbon credits. A carbon credit represents one tonne of carbon dioxide (or its equivalent in other greenhouse gases) that has been reduced or removed from the atmosphere. Companies can buy these credits to offset their own emissions or sell them to others who need them to offset their emissions.
They have long been a key tool in the fight against climate change. They allow companies to buy and sell carbon credits, which can be used to offset their emissions. But in recent years, these markets have struggled to gain traction. In this article, we’ll take a closer look at the challenges facing carbon markets and explore some potential solution
Carbon markets are typically created by governments, which set a cap on the total amount of emissions that can be released by a particular sector (e.g. power plants, factories). Companies that emit less than their allotted amount can sell their excess credits to companies that emit more than their allotted amount.
While carbon markets have the potential to be an effective tool in the fight against climate change, they have faced a number of challenges in recent years. Some of the most significant challenges include:
Despite these challenges, there are a number of potential solutions that could help carbon markets to regain their footing. Some of these solutions include:
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