Carbon credit
A carbon credit is a uniquely tracked, tradable unit issued by a carbon-crediting programme to represent a quantified greenhouse gas emission reduction or removal, typically one metric tonne of carbon dioxide equivalent relative to an approved baseline, after applying the programme’s methodology and verification rules.
In simple terms
A project or programme first measures a mitigation outcome against an approved baseline. After validation, monitoring, verification, and programme review, eligible units may be issued into a registry with serial numbers. Credits can then be transferred and eventually retired or cancelled. A unit’s existence does not by itself establish its quality or the claim it supports; additionality, permanence, leakage, double-counting safeguards, methodology, host-country accounting, and programme rules all matter.
Why it matters
Carbon credits can channel funding to emissions reductions and carbon sequestration and can be used in some compliance or voluntary systems, including defined net zero strategies. They also create accounting and integrity risks when outcomes are overestimated or claimed more than once. Transparent registries, robust methodologies, independent assurance, and retirement evidence help users evaluate the unit behind a carbon offset or climate claim.
Example
For example, a crediting programme can issue serialized units after a registered activity documents verified removals against its approved baseline. A buyer may hold or transfer those units, but to use them for an eligible offset claim it retires the required quantity and discloses the relevant programme and project information.
How it differs
Carbon offset
A carbon credit is a tradable, serialized unit representing a quantified mitigation outcome; a carbon offset is the use of such an external outcome to compensate for emissions within a separate footprint boundary.