Carbon is fast moving into the lexicon of governments, boardrooms and households around the world. Whether it's understanding emissions and compliance obligations, reducing the carbon footprint of an organization, investing in alternative technologies or purchasing offsets, carbon markets are becoming a key factor in addressing climate change.

Carbon markets work in tandem with credible domestic and global emissions trading schemes and voluntary activity. They deliver the necessary price signal that gives economic incentives to reduce greenhouse gas emissions and make a meaningful contribution to the global action against climate change.

The term "carbon market" refers to the buying or selling of emissions units that have been either distributed by a regulatory body (such as a state or federal government), or that have been generated by greenhouse gases emission reduction projects that result in the removal, reduction, avoidance or storage or carbon. Greenhouse gas emission reductions are traded in carbon credits, which each represent the removal from the atmosphere of one tonne of carbon dioxide, which is consequently the underlying commodity in the carbon market.

However, as the reasons for purchasing credits vary all over the world, as do the credits themselves, the buyers, sellers, and the demand and supply in these markets is very different. As a result, the price of a tonne of CO2 can currently differ significantly between markets.

The global market is currently divided into a compliance market (over 99% of the volume) and a much smaller but very fast growing voluntary market.