Carbon credits Carbon credits are generated by enterprises of the developing world that shift to cleaner n technologies and thereby save on energy consumption, consequently reducing their greenhouse gas emissions. For each tonne of carbon dioxide (the major GHG) emission avoided, the entity can get a carbon emission certificate which they cansell either immediately or through a futures market, just like any other commodity. The certificates are sold to entities in rich countries, like power utilities, who have emission reduction targets to achieve and find it cheaper to buy 'offsetting' certificates rather than do a clean-up in their own backyard. This trade is carried out under a UN-mandated international convention on climate change to help rich countries reduce their emissions. What is meant by carbon credit? Who gets it? What is its significance? In financial circles carbon credit is often mentioned. Ido not understand its significance. 7 months ago Best Answer - Chosen by Asker Carbon credits are a key component of national and international emissions trading schemes. They provide a way to reduce greenhouse effect emissions on an industrial scale by capping total annual emissions and letting the market assign a monetary value to any shortfall through trading. Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price. Credits can be used to finance carbon reduction schemes between trading partners and around the world.