What is a carbon credit?

A Carbon Credit (also known as a carbon offset) represents one metric ton of
CO2e emissions avoided from an emission reduction project. Carbon Credits
can be used to offset carbon emissions generated by governments,
organizations or individuals (however, Carbon in setting is preferable)

How is a carbon credit generated?

A carbon credit has to prove the concept of additionality. Additionality

addresses the question of whether the project (for example a CLP windfarm)
would have been commercially viable, and therefore built, without revenue
support from sale of carbon credits during project operation. Projects that
yield strong financial returns even in the absence of revenue from carbon
credits, or that are compelled by regulations, or that represent common
practice in an industry, are usually not considered additional.

What is the value of carbon credit? And Why is one carbon credit more
expensive than another?

I frequently have similar inquiries, so allow me to try to explain the various

valuation techniques and models for carbon credits and how they affect
pricing:

Value Driven: Using a value-driven model to set a price for carbon credits can
truly account for the full environmental, social and economic impacts of a
specific project—that is, both in emissions reductions plus the additional
development benefits that can transform lives.

Market value: The voluntary carbon market today is primarily driven by

supply and demand, regardless of the implications to the project in terms of
long-term viability. (Thats $7.60 per short ton of carbon dioxide (CO2))

Price: It calculates a minimum price that ensures the average costs of the
projects will be covered, plus an additional "Fairtrade Premium" on top that
goes directly to the local community to fund activities that help them adapt
and become more resilient to an already changing climate.

Economic value: The sum of individual preferences for a given level of

provision of that good or service. Economic values are usually expressed in
terms of marginal/incremental changes in the supply of a good or service,
using money as the metric (e.g., $/unit).