How are carbon credits prices determined?

There are two main ways of determining the prices of carbon credits, namely: The first option works for organizations that set internal carbon credits prices to guide their investment decisions. 3 Such carbon offset companies have their internal mechanisms of determining carbon credits prices based on various factors, which will be discussed later.

What is carbon pricing?

Carbon pricing can take different forms and shapes. In the State and Trends of Carbon Pricing series and on this website, carbon pricing refers to initiatives that put an explicit price on GHG emissions, i.e. a price expressed as a value per ton of carbon dioxide equivalent (tCO 2 e).

What is a direct carbon pricing instrument?

In general, both the State and Trends of Carbon Pricing series and the Carbon Pricing Dashboard focus on direct carbon pricing instruments – that is, those that apply a price incentive directly proportional to the greenhouse gas emissions generated by a given product or activity (primarily carbon taxes, ETSs, and carbon crediting mechanisms).

Should I buy a carbon credit?

Purchasing high quality carbon credits is an effective way to contribute the transition to a low-carbon, climate secure world. However it can seem complex – especially answering what seems to be a simple question, "How much should I pay for a carbon credit?" Why is one carbon credit more expensive than another?