Nairobi, March 1 -- As countries around the world race to combat the effects of climate change, carbon trading continues to gain traction.

Carbon trading is the buying and selling of permits of carbon credits that allow the holder to emit a certain amount of carbon dioxide and other greenhouse gases (GHGs).

Financial site Investopedia defines a carbon credit as the equivalent of one tonne of carbon dioxide or any other GHGs that an organisation can emit into the atmosphere.

Essentially, companies are awarded credits to allow them to continue to pollute up to a certain limit, often on a reducing basis.

What happens when a company exceeds its limits?

While some businesses are able to cut their emissions, others are not able to do so. F...