SPEAKER: By now, you know that carbon markets foster environmental innovation and encourage individuals and companies to reduce their carbon footprint. But what exactly are they? In a nutshell, carbon markets are trading systems in which carbon credits are bought by market participants wishing to offset emissions. Credits are available for purchase through official climate mitigation projects in both voluntary and compliance carbon markets. Each carbon credit represents the reduction or removal of an estimated one metric ton of CO2. In any given carbon market, there are two types of participants, project developers, also known as sellers, and companies or individuals, otherwise known as buyers. Carbon markets serve as the mediator between buyers and sellers. Let's take a closer look at the role of sellers. They offer a variety of emission reduction projects to the market. For example, a project that finances the production of clean burning stoves instead of wooden stoves with the goal of reducing deforestation. To maintain credibility and transparency, each project undergoes official checks by an independent third-party auditor before it's converted into carbon credits. The other half of market participants, the buyers, are typically companies, governments, or individuals seeking to offset their unavoidable emissions. For example, an airline that's looking to offset their emissions from burning jet fuel, or a frequent flyer hoping to make up for the emissions their flights produce. The trading process is simple. When a seller joins the market with a verified project, the buyer can purchase carbon credits from them. In exchange for the credits, the buyer receives a certificate allowing them to emit an equal amount of the carbon being removed by their project. Once any carbon credit has been retired, it cannot be used again for the same purpose, nor can it be sold to or used by another entity. By putting a price on pollution and creating an economic incentive for reducing emissions, carbon markets will succeed in transforming our planet into a greener and cleaner space. Stay tuned for our next video, where we will continue exploring the world of carbon markets. Until then, learn about our work and get in touch at publicisapient.com.