A carbon credit represents one metric ton of CO2 (or equivalent greenhouse gas) that has been reduced, avoided, or removed from the atmosphere. When you buy a credit, you're funding a project that achieves that reduction on your behalf.
The Basics
Carbon credits work through a simple chain:
- A project reduces emissions — reforestation, renewable energy, methane capture, cookstove distribution, direct air capture, etc.
- An independent verifier confirms the reduction — organizations like Verra (VCS), Gold Standard, or American Carbon Registry audit the project
- Credits are issued — each credit = 1 ton CO2 equivalent, registered in a public registry
- You purchase and retire credits — 'retiring' means the credit is permanently claimed and can't be resold
Project Types
| Project Type | Cost/ton | Permanence | Co-benefits |
|---|---|---|---|
| Reforestation | $10-30 | Long-term (risk of reversal) | Biodiversity, watershed protection |
| Renewable Energy | $5-15 | Duration of project | Local air quality, energy access |
| Methane Capture | $8-20 | Ongoing | Reduced local pollution |
| Cookstove Distribution | $10-25 | Equipment lifetime | Health, deforestation reduction |
| Direct Air Capture | $200-600+ | Permanent | Scalable, verifiable |
Verification Standards
Not all carbon credits are equal. Look for credits verified by established standards:
- Gold Standard — founded by WWF, highest bar for co-benefits and stakeholder consultation
- Verra (VCS) — Verified Carbon Standard, the largest voluntary market registry
- American Carbon Registry — U.S.-focused, strong methodologies
- Climate Action Reserve — North American projects with rigorous monitoring
Credits without third-party verification from a recognized standard should be treated with skepticism.