It provides a very good incentive for companies to improve their efficiency and reduce their greenhouse gas emissions, by implementing such reductions into a physical cash benefit. Moreover, it is a disincentive for being inefficient, as companies are effectively penalized for failing to meet emissions goals. In this way, regulation is accomplished largely through economic terms, rather than through draconian government measures, encouraging people to engage in carbon trading because it's potentially profitable.Basically, it is a practice which is designed to reduce overall emissions of carbon dioxide, along with other greenhouse gases, by providing a regulatory and economic incentive.
Implementation of Carbon Credits
Carbon credits can be implemented from various types of projects including: