What is the carbon marketplace?
Last updated
Last updated
When it comes to the sale of carbon credits within the carbon marketplace, there are two significant, separate markets to choose from.
One is a regulated market, set by “cap-and-trade” regulations at the regional and state levels.
The other is a voluntary market where businesses and individuals buy credits (of their own accord) to offset their carbon emissions.
Think of it this way: the regulatory market is mandated, while the voluntary market is optional.
When it comes to the regulatory market, each company operating under a cap-and-trade program is issued a certain number of carbon credits each year. Some of these companies produce fewer emissions than the number of credits they’re allotted, giving them a surplus of carbon credits.
On the flip side, some companies (particularly those with older and less efficient operations) produce more emissions than the number of credits they receive each year can cover. To comply with the law, these businesses purchase carbon credits to offset their emissions.
