Determine Baseline Emissions: The first step in the carbon credits process is to determine the baseline emissions for a project. This involves measuring the amount of greenhouse gas emissions that would have been produced if the project had not been implemented.
Estimate Project Emissions: Once the baseline emissions have been established, the next step is to estimate the emissions that will be produced by the project. This is done by modeling the project and calculating the amount of greenhouse gases that will be emitted.
Calculate Emissions Reductions: The difference between the baseline emissions and the estimated project emissions represents the emissions reductions that will be achieved by the project. This is the basis for the carbon credits.
Verify Emissions Reductions: To ensure that the emissions reductions are accurate and credible, an independent third party verifies the calculations and methodology used to estimate the emissions reductions.
Issue Carbon Credits: Once the emissions reductions have been verified, carbon credits are issued. Each carbon credit represents one metric ton of greenhouse gas emissions that has been avoided or reduced.
Sell or Trade Carbon Credits: Carbon credits can be sold or traded on carbon markets. Businesses that are unable to reduce their emissions can purchase carbon credits to offset their emissions and become carbon neutral.