What is a carbon credit? (In plain English.)

May 1, 2018

A carbon credit is like an environmental currency. Each credit is 1 ton of CO2 removed from the air.

Scientists and Engineers know how to measure the amount of credits projects like planting trees, improving wetlands, or capping methane gas at landfills create every year.

  • For example, planting an oak tree in Columbus Ohio and taking care of it for 40 years will make about 15 carbon credits because that oak tree will remove about 15 tons of CO2 over those 40 years as it grows.

Nonprofits like the Climate Action Reserve certify every project that makes carbon credits to make sure they are verified by a neutral 3rd party consultant before carbon credits can be sold to companies like Urban Offsets.

By buying 1 carbon credit, Urban Offsets becomes the owner of 1 ton of CO2 removed from the air. Without buyers like Urban Offsets, projects that create carbon credits will be unable to continue removing CO2 from the air; projects would go bankrupt. As a company, Urban Offsets has decided to keep buying carbon credits to pay project developers, cities, and universities to continue to remove CO2 from the air.

After we buy a carbon credit, Urban Offsets can do one of two things:

  • We can use the carbon credit to “offset” our emissions or the emissions of our customers, or
  • We can keep the carbon credit in an account, like a bank, to offset emissions in the future.