What **IS** a Carbon Credit?

Question

Hi All,

At a high level, I understand what the purpose of carbon credits are, how the marketplace functions more broadly, and how to pursue issuance of carbon credits.

**But at a very basic level, what IS a carbon credit?** Is it like an NFT or more like a company stock? Are they regulated by the federal government (in the US at least) like a stock? How can one be sure that a carbon credit is legitimate and not a forgery or otherwise worthless?

Thanks in advance for any explanation, especially if you can provide source(s)! Google search has produced vague, mostly unhelpful results.

In: 3

Answer 1

You can think of carbon credits as a “permission slip” for a company to emit up to a certain set amount of CO2e that year.