Carbon credits are permits that allow companies or organizations to emit a certain amount of carbon dioxide or other greenhouse gases. One credit typically represents one ton of carbon dioxide emissions. These credits can be bought and sold in carbon markets, encouraging businesses to reduce their emissions to save money or profit from selling excess credits. The goal of carbon credits is to combat climate change by creating a financial incentive for reducing greenhouse gas emissions. By capping total emissions and allowing trading, it aims to lower overall pollution levels while promoting investment in cleaner technologies and practices.