Carbon credits are tradable permits that allow the holder to emit a specific amount of carbon dioxide or equivalent greenhouse gases. One credit typically represents one metric ton of CO2, and they are bought and sold on carbon markets as part of emissions reduction schemes. As regulatory pressure around climate change intensifies globally, carbon credit markets have grown into a significant asset class for traders and investors focused on ESG themes.
Example
“European carbon credit prices hit a new all-time high as the EU tightened emissions caps across heavy industrial sectors.”