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The money they receive from the sale provides the capital needed to plant even more trees or protect existing forests from logging. 4. Retirement: Ending the Cycle
Meanwhile, Steel-Forge is trying to lower its environmental impact. While they’ve upgraded their machinery, their industrial process still emits 1,000 tons of CO2 more than their local government allows (a "cap"). To avoid heavy fines, Steel-Forge goes to a marketplace like Carbonmark or a Voluntary Carbon Market . 3. The Exchange: Buying and Selling Steel-Forge buys the 1,000 credits from Eco-Growers. buy sell carbon credits
They have now "offset" their excess pollution by funding a project that removed the same amount of CO2 elsewhere. The money they receive from the sale provides
What are carbon markets and how do they work? | UNDP Climate Promise The Exchange: Buying and Selling Steel-Forge buys the
Eco-Growers spends years planting millions of native trees. As these trees grow, they naturally "inhale" carbon dioxide from the atmosphere. According to Investopedia , a is a permit representing the removal of one metric ton of carbon dioxide. Once an independent auditor verifies that Eco-Growers has successfully sequestered 1,000 tons of CO2, they are issued 1,000 digital carbon credits. 2. The Buyer: Offsetting Emissions