Eli5:- Carbon Credits. Why do they exist? What’s their purpose? How do they work? Is it a fad?

Question

Companies are talking about their ESG efforts, and I’ve noticed this term appearing a few times now.

In: 13

Answer 1

It’s impossible to completely remove all CO2 emissions and still do business for many companies. So to achieve “net zero” emissions companies can invest in projects that remove CO2, such as planting trees or even just protections for existing forests. That’s what carbon credit is, also called carbon offsets.

The actual effectiveness is questionable. Good deep dives on that [here](https://youtu.be/6p8zAbFKpW0?si=Fhf9Byc2rjg_haZm) or [here](https://youtu.be/AW3gaelBypY?si=awOasrwGVaiROuS_)