Question:
What do carbon credits signify?
What do carbon credits signify?
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Remember: \textbf{credit = permit}. A cap limits the total; credits specify {who} may emit {how much}.
Updated On: Aug 12, 2025
- Credits given in the course of carbon products sales
- Entitlements to emit certain quantity of greenhouse gases
- Permissible amount of Carbon dioxide in the atmosphere
- The extent of carbon required to ensure sustainable development
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The Correct Option is B
Solution and Explanation
What a carbon credit is: In cap\textendash and\textendash trade systems, a regulator fixes a total {cap} on greenhouse\hyp gas (GHG) emissions for a period. That cap is split into {allowances} (permits), each authorizing the holder to emit a specified amount (often one tonne of \(\mathrm{CO_2}\) equivalent). These permits are {tradable}—firms that cut emissions cheaply can sell excess permits to those facing higher abatement costs.
Why (b): Option (b) directly states this: a carbon credit is an {entitlement to emit a certain quantity}.
Why others are wrong: (a) confuses credits with commercial discounts. (c) speaks about atmospheric concentration (ppm), which credits don’t define. (d) is a fuzzy planning statement; credits don’t measure the “extent of carbon” needed for sustainability—they allocate the legal right to emit under a cap.
Why (b): Option (b) directly states this: a carbon credit is an {entitlement to emit a certain quantity}.
Why others are wrong: (a) confuses credits with commercial discounts. (c) speaks about atmospheric concentration (ppm), which credits don’t define. (d) is a fuzzy planning statement; credits don’t measure the “extent of carbon” needed for sustainability—they allocate the legal right to emit under a cap.
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