Finance
A carbon credit is a tradable certificate representing the reduction or removal of one metric ton of CO 2 (or equivalent greenhouse gas) from the atmosphere. Companies or projects earn carbon credits by cutting emissions (for example, through renewable energy projects or reforestation) and can sell these credits to others needing to offset their own emissions. In sustainable finance, carbon credits provide a market-driven way to price carbon and fund emissions-reducing projects, making them valuable in meeting corporate or regulatory climate targets.