For example, if an environmentalist group plants enough trees to reduce emissions by one ton, the group will be awarded a credit. If a steel producer has an emissions quota of 10 tons, but is expecting to produce 11 tons, it could purchase this carbon credit from the environmental group. The carbon credit system looks to reduce emissions by having countries honor their emission quotas and offer incentives for being below them.
Read more: Carbon Credit Definition | Investopedia http://www.investopedia.com/terms/c/carbon_credit.asp#ixzz3uOWXdXKy
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