Carbon credits are tradable certificates representing the reduction or avoidance of greenhouse gas emissions. They are bought and sold in carbon markets, akin to financial markets, with prices determined by market supply and demand. Companies and individuals purchase carbon credits to meet emission reduction targets or sell excess credits for additional revenue. This trading system incentivizes emission reductions and supports the shift to a low-carbon economy globally. Emissions trading systems worldwide use carbon credits to create market mechanisms that spur emissions reductions and promote sustainability.