A snapshot of carbon markets
What is a carbon market?
In short, carbon markets are trading systems that create economic incentives for reducing green house gas emissions and removing carbon dioxide from the atmosphere.
Why do we need them?
Our climate is in crisis and the science is clear: global temperatures are rising and human activities are driving this change at an unprecedented rate. Now we need to reduce greenhouse gas (GHG) emissions and remove excess CO₂ from our atmosphere to avoid the worst consequences of global warming. The question is: how do we enable this at scale?
How does it work?
The idea is simple: put a price on GHG emissions so heavy pollution has consequences, and climate action is rewarded. These markets will then promote climate-friendly behavior, pushing countries and companies to integrate climate action into their value chains — and beyond.
Through these markets, companies, industries, and governments can invest in certified climate action to take responsibility for the emissions they still generate — or have emitted historically. Taking responsibility is an essential part of addressing climate change, and carbon markets provide a structured way to do so.
What types of carbon markets exist?
There are two main types:
“Compliance markets”, where emission allowances are sold and bought as a result of regional, national and/or international policies. Participants, typically large emitting companies, are legally required to manage their emissions by reducing them directly and/or purchasing allowances to cover any emissions above their allocated limit - or else, they might get fined.
“The voluntary carbon market” or “VCM”, where carbon credits are issued, sold and bought on a voluntary basis. Participants, typically companies with ambitious sustainability targets , choose to go beyond their mandatory decarbonization efforts to drive important climate action faster.
-
Take a deep dive into how the different types of carbon markets work in our in depth article Deep dive on carbon markets: Compliance vs. Voluntary.
Noora empowers businesses to take meaningful climate action through certified carbon credits from Nordic forests. By partnering with local forest owners and using advanced monitoring technology, we help protect and enhance nature’s role in removing CO₂ from the atmosphere - while contributing to local environmental responsibility and our shared, global climate goals.
Are you a forest owner interested in generating carbon income, or a business looking to make a measurable impact on climate? Get in touch with us to learn more!
Follow us on LinkedIn to stay updated on our latest projects and news.
