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Glossary:Voluntary carbon markets
Voluntary carbon markets allow carbon emitters to offset their unavoidable emissions by purchasing carbon credits emitted by projects targeted at removing or reducing GHG from the atmosphere. Each credit – which corresponds to one metric ton of reduced, avoided or removed CO2 or equivalent GHG – can be used by a company or an individual to compensate for the emission of one ton of CO2 or equivalent gases. When a credit is used for this purpose, it becomes an offset. It is moved to a register
for retired credits, or retirements, and it is no longer tradable.
Companies can participate in the voluntary carbon market either individually or as part of an industry-wide scheme, such as the Carbon Offsetting and Reduction Scheme for International Aviation, which was set up by the aviation sector to offset its greenhouse gas emissions. International airline operators taking part in CORSIA have pledged to offset all the CO2 emissions they produce above a baseline 2019 level.
While compliance markets are currently limited to specific regions, voluntary carbon credits are significantly more fluid, unrestrained by boundaries set by nation states or political unions. They also have the potential to be accessed by every sector of the economy instead of a limited number of industries.[1]