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A carbon credit is a tradable certificate or permit that represents the right to emit one metric ton of carbon dioxide or an equivalent amount of another greenhouse gas (GHG). Carbon credits are used to regulate and reduce the emission of GHGs in the atmosphere, as these gases contribute to climate change. The concept is based on the principle of cap and trade, where a limit (cap) is set on the total amount of GHGs that can be emitted by organizations, sectors, or countries.