What are carbon credits?

Carbon credits are certificates representing avoided emissions. One example of a carbon project is a methane cogeneration facility. Methane has a global warming potential 23 times that of carbon dioxide, making it one of the most destructive greenhouse gases. However, methane can be captured from landfills and farms, and used to make electricity. During the combustion process, each molecule of methane is converted into a molecule of carbon dioxide. Accordingly, converting one ton of methane into one ton of carbon dioxide is equivalent to preventing 22 tons of carbon dioxide from entering the atmosphere. Carbon credits make projects like methane congeneration facilities possible because, without pollution laws or tax-breaks, landfill operators and farmers have no economic incentive to build such expensive systems to generate electricity. So when you acquire carbon credits, you not only "offset" a certain amount of carbon, but you also reward good environmental practices and advance clean technologies.