'Carbon credits' are traded in carbon markets in the global effort to reduce world pollution.The principles that underpin carbon credits are enshrined in the Kyoto Protocol.
Each carbon credit represents 1 tonne of atmospheric carbon dioxide which has been avoided or captured. It is bought by an entity wanting to reduce its carbon footprint, and it is sold to them by an entity implementing a project somewhere else that will reduce or capture carbon dioxide emissions.
Talking about carbon involves us in a complicated mix of science, economics, politics, business and the simple desire for a cleaner world. The important thing to know is that the mandatory and voluntary buying and selling of carbon credits collectively bring about the development and use of greener technology and the creation or preservation of native forests and other natural resources.
In Forest Carbon's case we develop woodland creation schemes for carbon capture. When our partners pay for the planting of a certain area of new woodland they are in fact paying for the removal from the atmosphere of a certain number of 1-tonne units of CO2 (or in effect therefore buying a certain number of 'carbon credits'). These 'credits' are not traded further by our buyers, they are instead ‘retired’ (ie cancelled against the emissions the buyer was seeking to capture) and serve only to register the amount of CO2 removal a buyer has sponsored.
LTWO Ltd are currently exploring the legal status of ownership of carbon credits relating to Forestry.