A Carbon Credit is a form of emission reduction that plays into the cap and trade programs. It places a monetary amount on emitted carbon through the form of a credit.

In a cap and trade program, a limit is placed on the amount of carbon dioxide that can be emitted by companies. The allowanced amount of carbon given to emitting businesses is in the form of credit that represents one metric tonne of carbon.

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Other Sources

Investopedia. “Carbon Credit.” Investopedia. http://www.investopedia.com/terms/c/carbon_credit.asp. Accessed July 26, 2016.

Nature Conservancy Canada. “Carbon: Frequently Asked Questions.” Nature Conservancy Canada. http://www.natureconservancy.ca/en/where-we-work/british-columbia/featured-projects/darkwoods/carbon-faqs.html?referrer=https://www.google.ca/. Accessed July 26, 2016.