A carbon credit is a tradable permit or certificate that allows the holder to emit one tonne of carbon dioxide or an equivalent amount of other greenhouse gases. It is fundamentally related to cap-and- trade schemes, where an entity is allocated a certain allowance of emissions (carbon emission allowed). If the entity emits less than this allowance (actually emitted carbon), the difference constitutes surplus credits that can be sold or banked.
What is carbon credit ?
Asked in OPSC CS Prelims 2016 · Topic: Greenhouse Effect and Climate Change (Carbon Footprint, Carbon Sequestration, and Carbon Pricing Mechanisms)
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Answer: A. It is the difference between the carbon emis‐ sion allowed and actually emitted carbon
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