This section explains how carbon credits and carbon markets work, in plain English and with a source for every figure. Read it before you buy, so you can tell a well-documented credit from a vague promise.

Four ideas to know first

Where to start

Start with what a carbon credit is: how one is created, issued, sold and retired, and who keeps the records. Then see how a credit differs from an offset in credit vs offset, the two kinds of tonne in removal vs avoidance credits, and how to check a purchase in carbon credit retirement.

For the bigger picture, read what the carbon market is for its size, the people involved and how prices form. Finally, voluntary vs compliance markets explains why a permit to emit and a credit for a project are not the same thing, with examples from the EU, the UK, California and India. Article 6 of the Paris Agreement and CORSIA cover trading between countries and airline offsetting, and our history of carbon markets shows how it all began.

To understand the plumbing behind every credit, read how carbon credits are created, then carbon standards, carbon registries and what a credit’s vintage tells you.

How these guides are written

Each page answers its question in the first few lines, then explains the detail. Every figure, rule and date links to a primary source, such as a standard, a regulator or the World Bank, listed at the end of the page. We review these pages every quarter and show the review date under each title.

When you are ready to act, our guide to buying carbon credits puts this into practice: cut what you can first, then buy and retire credits for what is left.