The management of CO2 (carbon dioxide) emissions and carbon credits in the financial market involves the trading of carbon credits as a way to mitigate and offset greenhouse gas (GHG) emissions. Here's a brief overview of how this process typically works.
There are also international mechanisms, such as the Clean Development Mechanism (CDM) under the Kyoto Protocol, that allow projects in one country to generate carbon credits that can be traded globally.
However, the landscape of international carbon markets is dynamic, with various agreements and mechanisms evolving over time.
Overall, the financial market for carbon credits provides a mechanism for incentivizing emission reductions and promoting sustainable practices by putting a price on carbon.
The effectiveness of these markets depends on the stringency of regulations, market transparency, and the development of reliable measurement and verification methods for emissions reductions.
https://alphaarchitect.com/2022/03/an-introduction-to-investing-in-carbon-markets/
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