# Carbon Credits

There are main types of carbon credits: carbon avoidance, emission reduction and carbon dioxide removal. Carbon avoidance is when an organization is paid to not do an action that would produce CO2, such as cutting down a forest. This is the most common carbon credit type. This is often classified under the emission reduction credit. These credits are produced when an entity reduces the emissions they were originally producing. Carbon dioxide removal is the second type of carbon credit. Carbon removal is when an organization is paid to do an action that would remove CO2 from our atmosphere, like planting a forest. Both types of credits must have their actions go through a measurement, reporting and verification (MRV) process by a third party. When purchasing credits entities typically go through a marketplace with intermediaries connecting the producer of credits and buyers. One such intermediary is Verra, which Toucan uses to bridge their credits onto the blockchain. Broadening Scope If carbon credits were used to offset all CO2 impacts without addressing other ecosystem services (such as biodiversity, soil quality) and social rights, we would have failed in building systems that align with the preservation and the regeneration of the biosphere. Properly designing carbon credits and other types of credits can lead to co-benefits of these other ecosystem services. MRV of these ecosystem services and social rights is difficult, as well as properly valuing them. However, organizations are already creating MRV methodologies that can be utilized (such as Regen Network, BasinDAO, and Avano).
