A company's or organization's emissions cap (or "cap" in the case of Cap & Trade) is represented by the number of credits granted to that specific entity. If a management team is successful in keeping corporate emissions below their cap, the firm will have extra carbon credits, which they can either keep for later use (or sell) or sell right away into the compliance Carbon Credit Market, which is regulated by the regulatory body. A management team is in non-compliance and is required to make up the difference if it is unable to keep the company's emissions within the limit. In order to purchase carbon credits from a "under-emitter" within their Cap & Trade network, over-emitters turn to the carbon market. Carbon Credit Market, By Sector (Energy, Transportation, Residential and Commercial Buildings, Industry, Agriculture, Forestry, and Water and Wastewater), and by Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) - Size, Share, Outlook, and Opportunity Analysis, 2020 - 2027.
The carbon credit is a tradable permit, granting companies the right to emit a certain amount of greenhouse gas. It represents one metric ton of carbon dioxide equivalent. Credits can be purchased or traded by individuals or businesses, and are issued in different forms. Currently, the voluntary market for carbon credits is fragmented and lacking in transparency. This makes it difficult to verify projects and determine how they are contributing to the reduction of greenhouse gas emissions. Moreover, it is possible for sellers to receive only part of the demand for the credits. Because of this, it is also possible for fraudulent activities to occur. Carbon credits are issued to companies that meet emissions caps. Typically, a company is given a set number of credits to offset its emissions every year. However, there are some companies that produce more than they are entitled to. As a result, they look to the regulatory market to trade these credits.
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Click Here For the Carbon Credit Market Press Release
