> Carbon credits are issued to companies in the industry based on a certain amount they are allowed to pollute. This is the cap, the credits are the trade, in "cap-and-trade". However, all that pollution still gets polluted in the end, the only thing that changes is who does it, and who pays.
The baseline is that all the credits are being bought by industrial polluters. If you personally buy a credit, industry has to pollute less. If you buy 1.5 credits for every credit-worth of extra pollution you cause, the pollution in the world is reduced. In theory.
> The world still gets more polluted either way.
The more credits people buy and sit on, the less pollution there can be. At first this is all low hanging fruit, but eventually the price gets so high that it's cheaper for industries to pay for carbon capture than to pay for credits. If enough are bought, and the price of credits goes high enough, total regulated pollution drops to zero or even goes under zero.
That's not an indulgence if you can minimize the loopholes.