Understanding How the Carbon Credit Market Works and Why It Matters
As climate change accelerates, businesses, governments, and individuals are turning to the carbon credit market as a practical solution for reducing their environmental impact. This market provides a way to support verified projects that remove or reduce greenhouse gas emissions, offering a bridge between today’s emissions and a more sustainable future.
Understanding how the carbon credit market operates empowers you to make informed decisions, take meaningful climate action, and contribute to a low-carbon economy—whether you’re offsetting personal travel or building a corporate sustainability strategy.
Local and Global Projects
The carbon credit market includes both local and international projects that support not only climate goals but also social and environmental co-benefits. At Evergreen Carbon, we’re committed to sourcing credits from sustainable development projects that align with the UN Sustainable Development Goals (SDGs). These include efforts to:
- Reduce hunger and poverty
- Improve access to clean water and sanitation
- Advance education and health outcomes
- Promote sustainable economic growth and environmental restoration
Evergreen Carbon provides offsets from numerous project types located locally and globally. Your offset portfolio can contain carbon credits from one or more projects. We are committed to supporting sustainable development projects that have co-benefits and other Sustainable Development Goals.
What is the Carbon Credit Market?
The carbon credit market is a system that allows individuals, businesses, and organizations to reduce their carbon footprint by purchasing verified carbon credits. One carbon credit represents the removal or reduction of one metric ton of greenhouse gas (GHG) emissions from the atmosphere. These credits are generated by certified carbon offset projects that deliver measurable climate benefits.
Whether you’re participating in a compliance program or voluntarily offsetting your emissions, the carbon credit market provides a flexible, impactful way to take climate action.
What is a Carbon Credit?
A carbon credit (also referred to as a carbon offset) is a tradable certificate that confirms one metric ton of GHGs has been reduced, avoided, or removed from the atmosphere. Carbon credits can be purchased and retired – a unit of exchange that businesses, organizations, and individuals can use to offset their greenhouse gas emissions. One carbon credit is equivalent to one metric ton of greenhouse gases removed from the atmosphere. A carbon credit and a carbon offset are synonymous terminology.
These credits are crucial tools in the global effort to mitigate climate change and are the foundation of how the carbon credit market operates.
How do Carbon Credits work?
Carbon credits are created through real-world environmental projects that undergo rigorous third-party verification. Once a project’s emissions reduction is verified, credits are issued by trusted registries and made available for purchase on the carbon credit market.
Each carbon credit:
- Is independently verified for authenticity
- Is traceable to a specific project
- Is permanent, unique, and not double-counted
At Evergreen Carbon, all credits in our portfolio are sourced from verified, high-integrity projects that meet the highest standards in the voluntary carbon market.
All credits under these registries have controls to make sure that every carbon credit is verified to make it permanent. One carbon credit is a unique, independently verified reduction of greenhouse gases (GHGs) traceable back to the carbon project that generated the emission reduction.
What Types of Projects Generate Carbon Credits?
Carbon credits can be generated from a wide variety of projects around the world. Common project types in the carbon credit market include:
- Forestry and land use:
- Reforestation, afforestation, and avoided deforestation
- Methane capture: Capturing emissions from landfills and agricultural operations
- Renewable energy: Wind, solar, hydroelectric, and biomass projects
- Energy efficiency: Reducing emissions through more efficient processes or technology
- Industrial process improvements: Lowering GHG emissions through innovation
- Carbon capture and storage: Directly removing and storing CO₂ emissions from fossil fuel combustion
Evergreen Carbon offers flexible portfolios that can include credits from single projects or diverse blends of project types, both locally and globally.
Who Participates in the Carbon Credit Market?
There are two main types of carbon credit markets:
1. Compliance Market
This is regulated by governments and international bodies. Under a GHG compliance program, companies that are large emitters are subject to government policy, which often allow the use of carbon offsets for a portion of an emission reduction commitment. Large emitters are often required by law to reduce emissions and may use carbon credits to meet a portion of their obligations.
2. Voluntary Market
Open to individuals, small businesses, NGOs, and corporations not under regulatory mandates. Participants choose to offset emissions as part of their sustainability goals or corporate social responsibility strategies.
Whether you’re a large emitter or a conscious consumer, the voluntary carbon credit market offers a powerful way to contribute to global climate solutions.
How do I know that a Carbon Credit is real?
Carbon projects are governed by the GHG Registries.
- Climate Action Reserve (CAR) – A carbon offset registry for the U.S., Mexico and Canada.
- Verra – Verra registers carbon projects under a several different standards. The recognizable Verified Carbon Standard (VCS) is the largest carbon project registry for the worldwide voluntary carbon market. Other Verra standards ensure that carbon projects are also meeting human and ecological needs, such as the Climate Community and Biodiversity standard and the Sustainable Development Verified Impact Standard (SD VISta) ensures that the carbon projects are also meeting both human and ecological needs.
- American Carbon Registry (ACR) – A carbon offset registry for the voluntary and California regulatory carbon markets.
- Gold Standard Foundation (GSF) – A certification standard for offset projects located mostly in developing countries. Gold Standard projects have a high level of achievement of Sustainable Development Goals.
- UN Clean Development Mechanism – The UN CDM is an international registry used by compliance markets around the world.How can I calculate the emissions for my business or personal activities?
How can I calculate the emissions for my business or personal activities?
Every activity that produces GHG emissions—such as driving a car, using electricity, or running a business—has an associated emissions factor. For example, burning a gallon of gasoline emits approximately 8.8 kg of CO₂, or about 1% of a carbon credit.
To estimate your emissions:
- Use tools like the EPA’s Household Carbon Footprint Calculator
- Consult a professional for complex business operations and supply chain assessments
- Visit our Carbon Offset Basics page for starter guides and resources
For every activity that involves GHG emissions there will be an emission factor associated with that activity. The combustion of a gallon of gasoline emits the equivalent of about 8.8 kg of CO2, or a little less then 1% of a metric ton of GHGs (<1 carbon credit).
Carbon Credit Cart is providing a limited set of carbon footprints for some typical activities. The US EPA provides a household carbon footprint calculator. For businesses, with more complicated operational patterns, qualified professionals will be involved in calculating an organizations emissions.
Can Carbon Credits Solve Climate Change on Their Own?
While the carbon credit market is a powerful tool in the fight against climate change, it is not a standalone solution. Carbon credits should be part of a broader climate strategy that includes emissions reductions, energy transition, and sustainable business practices.
At Evergreen Carbon, we believe in using carbon credits to complement real-world reductions, accelerate the low-carbon transition, and support climate-resilient communities and ecosystems. Carbon Credit Cart is excited to help the carbon offset industry move forward while supporting the growth of small businesses and green jobs.
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