The carbon market is posing as a solution to the brutal climate crisis. But can it actually help combat climate change? Let’s understand in brief.
The brutal climate crisis is making global headlines. This largely anthropogenic crisis is triggering natural disasters of unprecedented intensities and also pushing global temperatures into uncharted territories. This is nothing but concerning.
In such tough times, the carbon market is posing as a solution. But can it actually help combat climate change? Let’s understand. Carbon markets turn carbon emissions into a commodity by attaching a price to it. These emissions fall into 1 of 2 categories.
You guessed it right, these are carbon credits and carbon offsets. Both these commodities can be both and sold on a carbon market. Carbon credits are like permission slips. If a company buys a carbon credit, it gains permission to generate one ton of carbon emissions.
On the other hand, if a company eliminates a unit of carbon from the atmosphere as part of its normal business processes, it gets one carbon offset. Other companies can purchase that carbon offset to reduce their carbon footprint.
