In order to combat climate change, it became crucial for industrialized countries to swiftly decarbonize and reduce their emission levels. A novel financial tool called carbon financing gives carbon emissions a monetary value and enables companies who want to offset their own emissions to do so by purchasing carbon credits produced by eco-friendly projects. One tonne of carbon dioxide or an equivalent amount of another greenhouse gas may be emitted by the holder of a carbon credit, a sort of trading permits. By directing industrial processes towards less carbon-intensive approaches than those used when there is no cost associated with emitting carbon dioxide and other GHGs into the atmosphere, the government attempts to maintain a limit on the emissions of harmful greenhouse gases (GHGs) from its industries.