A carbon market is a system that allows countries and companies to buy and sell permits for emitting carbon dioxide and other greenhouse gases. These permits are often referred to as carbon credits, and one credit typically represents the right to emit one ton of carbon dioxide. The goal of carbon markets is to reduce overall emissions by creating a financial incentive for businesses to lower their carbon footprint. In a carbon market, entities that reduce their emissions below a certain limit can sell their excess credits to those that exceed their limits. This trading mechanism encourages innovation and investment in cleaner technologies. Carbon markets can operate on a national level, like the European Union Emissions Trading System, or on a global scale, involving multiple countries and organizations.