Carbon credits put a price on greenhouse gas emissions by allowing organizations to offset one tonne of CO₂ or its equivalent through the purchase of a credit. These funds support verified projects that reduce or remove emissions, such as reforestation or clean energy initiatives. This system enables high-emitting companies to invest in climate solutions, helping them meet their sustainability goals while contributing to a net reduction in global emissions(What Are Carbon Credits?, n.d.).
Many governments and large companies are committing to net-zero emissions by mid-century or earlier, which requires major decarbonization across supply chains and operations.
Given the deep reliance on fossil fuels, this transition is especially challenging for sectors like energy, transport, and agriculture. For high-emitting industries, carbon credits serve as a practical interim solution allowing them to offset emissions while working toward long-term reductions.
To stay below the 2°C global warming target set by the Paris Agreement, all available strategies, including carbon credits, must be used creatively and effectively.
Reference:
What Are Carbon Credits? | CarbonNeutral. (n.d.). Carbon Neutral. Retrieved September 12, 2025, from https://www.carbonneutral.com/news/what-are-carbon-credits
