Carbon credits represent greenhouse gas emissions either being prevented from entering the atmosphere or reabsorbed from the atmosphere from projects such as improved technology or forest planting. Usually measured in tonnes of carbon dioxide equivalent, they form a basic unit/tradeable commodity on the carbon market. A carbon credit is also defined to represent a carbon reduction that is independently accredited to ensure that a tonne of CO2 equivalent from one project is the same as a tonne of CO2 equivalent from another project and can, in effect be traded.

The term ‘carbon credit’ is sometimes used interchangeably with ‘carbon offset’.