# What is Carbon Markets

A carbon market is a system designed to regulate and incentivize the reduction of greenhouse gas emissions, particularly carbon dioxide (CO2) and other pollutants contributing to climate change. It operates on the principle of cap-and-trade or carbon pricing, aiming to limit overall emissions while allowing flexibility for industries and organizations to meet their reduction targets.

<figure><img src="https://186665330-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fja7bELkhDuvYIWs0d9i3%2Fuploads%2Ffn5ACtNyiy9LJBebEYqf%2F16.png?alt=media&#x26;token=5f8da58d-d766-419b-b104-b38b8c4b4e92" alt=""><figcaption></figcaption></figure>
