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Explaining Carbon Credits

As an informed and responsible citizen, you must be aware of the harmful effect of carbon on the environment. Excessive exposure to CO2 causes air pollution that disrupts the well-being of the eco-system. All of this has a negative impact on human health, contributing to common illnesses such as headaches, high blood pressure, increased heart rate, breathing problems, and so on. This is where the concept of carbon credits is highly appreciated among environmentalists.

In this article, we will cover the subject – carbon credits. From what they are to how they came about to their function to other key information, we’ll discuss everything in detail!

What Are Carbon Credits?

A carbon credit is a type of certificate that represents a company’s right to emit a specific amount of carbon and other greenhouse gases. Carbon credits aim to minimize the release of harmful gases into the air. Production companies get a set number of credits that allow them to pollute the environment to a certain limit which reduces over time.

Note that one carbon credit allows the emission of a quantity equal to 1 ton of carbon dioxide. The companies are rewarded, through emission trading, also known as cap and trade, with incentives if they effectively reduce the emission of pollutions.

Taipei with heavy smog at sunset

Brief History of Carbon Credits

Anyone who calls “carbon credits” relatively new doesn’t know its history. The concept initially originated in the early 20th century by the British economist – Arthur Cecil Pigou who wanted industries to pay for the consequences of the use of harmful gases.  For the proposed heavy taxes and fees, the idea fizzled out immediately it got out in the open. However, it wasn’t until the late 1960s that the concept of emission trading came about with the help of a Republican administration.

In 1986, the leading economist John Dales coined the idea of tradable permits – carbon credits – as a means of reducing pollution. It was finally in 1990 when emissions trading became law as part of the “Clean Air Act of 1990”. Cap and Trade took effect in 1995 for the first time when acid rain emissions fell by a whopping 3 million tons! Eventually, in 1997, The United Nations Framework Conventions on Climate Change (UNFCC) put forward the Kyoto Protocol – an international treaty aimed toward all the industrialized nations to diminish their emissions of carbon and other greenhouse gases by at least 5% from 1990 – 2012.

Do Carbon Credits Work?

The purpose of carbon credits is to control gas emissions into the atmosphere. This process is administered by a government regulatory program – cap and trade. Companies have the advantage to buy and sell their carbon credits on the carbon market. Companies sell their carbon credits to other firms that may need them and are heavily incentivized as a result. When other firms buy carbon credits, they are able to offset their carbon footprint, which protects them from getting fined for exceeding the cap. In this way, it gets tricky to keep track of the carbon emission done by industries.

Unfortunately, carbon credits have fallen out of favor after their poor performance and failed outcomes. Many countries have declined to use them in the upcoming years. – What Do They Do?

When it comes to the fight against the emission of harmful greenhouses gases, the company – is often talked about., also known as the Foundation, is a non-profit organization based in East Aurora, New York that aims to fight global warming. The firm offers affordable greenhouse gas reduction programs to individuals, businesses, and industries to help them reduce their carbon footprints. achieves its goal through climate change education and tax-deductible donations made by individuals and businesses.

Both individuals and businesses are given various options, including reforestation, renewable energy, and energy efficiency projects in which they want to make a sizeable donation. The foundation sources carbon credits are approved by Gold Standard and VERRA carbon standard. The organization helps develop projects that help control the emission of greenhouse gases. In the past, has successfully built four Reducing Emissions from Deforestation and Degradation projects in Brazil under the VERRA standards.

The organization essentially supports projects that correspond with reforestation, renewable energy, and energy efficiency. Some of the notable work they have done in regards to these three main projects are as follows:


  • Tensas River Valley Reforestation Project
  • Return to Forest Project

Energy Efficiency

  • IdleAire Truckstop Electrification

Renewable Energy

  • Inland Biodigester Project
  • Horse Hollow Wind Energy Center

Since its inception, has partnered with 2000+ businesses such as Allstate, Dell, JetBlue, Orbitz, United States Environmental Protection Agency – to name a few. As of a 2019 report, the company organization has offset over 25 million metric tons of carbon dioxide emissions. This goes to show that the foundation has been doing well in its mission to curb global warming and its negative effects.


The signs and effects of global warming are everywhere. Becoming a partner can help you play a massive role in fighting climate change and making a transition to a clean future. Other than that, focus on sustainable reuse and recycling products to make a noticeable difference.

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