carbon credit

noun

Definition of carbon credit

:a tradable credit granted to a country, company, etc., for reducing emissions of carbon dioxide or other greenhouse gases by one metric ton below a specified quota
  • Once each member's emissions are converted into tradable credits, the exchange works like any financial market. If participants reduce their emissions below their target, they can sell their carbon credits on the exchange for a profit. If they fail to reduce their emissions, they must buy credits from others.
  • —Al GoreAn Inconvenient Truth2006
  • Under these “cap and trade” arrangements, governments impose limits on the amount of carbon that factories or companies are allowed to emit, and require those who want to exceed the limit to buy “carbon credits.”
  • —Jesse EllisonNewsweek14 July 2008
  • If a fast-growing country like China accepted an emissions cap and then overshot it, they would have to purchase carbon credits on the international market.
  • —Ralph Nader and Toby HeapsWall Street Journal3 Dec. 2008
— see also carbon offset

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First Known Use of carbon credit

1990


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