• Entry
  • Reader's guide
  • Entries A-Z
  • Subject index

Carbon Trading and Carbon Offsets

  • By: Robert Bailis
  • In: Encyclopedia of Geography
  • Edited by: Barney Warf
  • Subject:General Geography, Earth & Environmental Science

The carbon trade involves the exchange of either emission allowances or carbon offsets. An allowance is a right to emit a unit of greenhouse gases (GHGs)—typically defined as 1 metric ton of carbon dioxide (tCO2) or equivalent quantity of other GHGs. An offset is created when a project or policy achieves a reduction of GHG emissions relative to a baseline scenario (defined as emissions that would have occurred if no project or policy was undertaken). Both allowances and offsets are accepted, through various institutional arrangements, such as fungible units of trade. These forms of exchange have been introduced to facilitate GHG emission reductions through the use of market mechanisms. In creating these markets, society has placed a price on CO2 and related pollutants, which are ...

    • Loading...
    locked icon

    Sign in to access this content

    Get a 30 day FREE TRIAL

    • Watch videos from a variety of sources bringing classroom topics to life
    • Read modern, diverse business cases
    • Explore hundreds of books and reference titles