The most appealing thing about carbon credits is that they turn invisible emissions reductions into tradable units. When one tonne of carbon dioxide equivalent is avoided or removed somewhere, it may become a carbon credit after passing through methodology, monitoring and verification. Those who need to offset their emissions pay to buy it, and the money flows to the emissions reduction project.
Designed well, this can move funding across borders and support reduction efforts that would otherwise lack capital. Designed badly, it can become an indulgence — cheap in price, generous in peace of mind.
The international carbon market is finally starting to work
Article 6 of the Paris Agreement provides a framework for countries to cooperate on emissions reductions. Article 6.2 allows countries to transfer mitigation outcomes bilaterally; Article 6.4 establishes a carbon crediting mechanism supervised by the United Nations. After years of negotiation, the relevant rules have gradually taken shape since COP29. In 2025, the supervisory body approved the first methodology, and the UN mechanism also began moving forward with credit issuance — the international carbon market has shifted from “debating the rules” to actual operation.
The core value of this market is not to help emitters find cheap offsets, but to ensure that every reduction is real, additional and verifiable, and to prevent the same outcome from being counted twice by two countries.
Not every tonne of carbon is the same
On paper, every carbon credit represents one tonne of carbon dioxide equivalent. In terms of environmental benefit, however, the quality can vary widely.
If a renewable energy plant was going to be built anyway, does selling carbon credits really deliver an “additional” reduction? If a forestry project is hit by fire a few years later, do the removals it previously claimed still count? If a reduction is counted towards the targets of both the selling and the buying country, how can we say the world really has one tonne less?
So judging a carbon credit means looking beyond price and volume to the methodology, baseline, additionality, permanence, leakage risk, third-party verification and the effects on local communities.
The order of reduction cannot be reversed
A sensible path for a company is to first take stock of its emissions, then work to reduce emissions from energy use and production processes, and only then deal with the residual portion that cannot be eliminated in the short term. Carbon credits are a tool, not a substitute.
When a company expands high-emission activities on one hand while claiming “carbon neutrality” with low-priced credits on the other, the problem is not that it bought carbon credits, but that it put offsetting ahead of reduction. This is precisely the source of the greenwashing disputes of recent years.
For most people, there is no need to rush to become a carbon trading expert, but it helps to learn to ask the right questions: Which emissions does this carbon neutrality claim cover? How much has the company reduced itself? How much has it offset? What kind of credits did it use? Can the data be traced?
Carbon markets need trust, and trust cannot rest on a good-looking certificate. When carbon has a price, so does integrity. Genuinely high-quality carbon credits should make emissions reduction happen a little more, not allow emitters to change a little less.
References
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United Nations Framework Convention on Climate Change (UNFCCC), official materials on Article 6 of the Paris Agreement.
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UNFCCC, the Paris Agreement Crediting Mechanism and methodology developments in 2025.
