In the case of the carbon market, discussed in COP26, United Nations Climate Change Conference, what is bought and sold is not a physical product.
Each ton of carbon dioxide corresponds to one carbon credit, which can be bought or sold.
The credits are valid not only for cut emissions, but also for carbon gas captured – for example, by newly planted trees, which absorb the substance from the atmosphere in order to grow.
There are pollutants that heat the atmosphere, such as methane or nitrous oxide .
For example, an investor in country A may finance a wind farm in country B to replace electricity generated by a coal-fired power plant.