Which of the following statements about carbon credits is INCORRECT?

Explanation:

• A carbon credit is a tradable certificate or permit that represents the right to emit one metric ton of carbon dioxide (CO₂) or an equivalent amount of another greenhouse gas (GHG).
• Carbon credits are part of a market-based approach to controlling greenhouse gas emissions, allowing countries or companies that have exceeded their emission reduction targets to sell excess credits to others that need to offset their emissions.
• Carbon credits are not created when greenhouse gases rise above a baseline. Instead, carbon credits are created when greenhouse gas emissions are reduced below a specified baseline or standard. These credits represent a reduction in emissions and can be traded or sold to companies or countries that need to offset their emissions.

Additional Information

1. Carbon credits do correspond to a determined tradable quantity of greenhouse gas emissions, typically equivalent to one metric ton of CO₂ or its equivalent in other greenhouse gases.

2. Carbon credits are used in signatory countries to the Kyoto Protocol. The protocol established mechanisms for trading carbon credits as a way to help countries meet their greenhouse gas reduction targets.

3. The carbon credit system makes emissions a commodity, allowing for the trading and selling of emission reductions. This system incentivizes companies and countries to invest in reducing emissions.