Now... I don't have all of the intricate details, but to put it simply... Let's say you have a nice house and use more power than the "average American" (whatever that is... I'm sure Liberals can determine how much you really need). You can "offset" the extra power you're using by buying "credits" to compensate.
Carbon credits sounds really important doesn't it? Well... it's basically a sheet of paper saying you have purchased or invested in environmental programs in an attempt to offset (code for "make you feel better") the extra power you're using. Carbon credits don't reduce anything and the same amount power is still used.
Why can't people invest in something simply because it's good for the environment? For example, I recycle like crazy (more than my weekly bin can hold) and buy green products whenever possible (including organic groceries), but I don't need to buy stupid carbon credits to get that feeling of environmental equality.
If you want a little more than my opinion, take a look at a couple of these links. While you do that, I'm going to take a drive in my SUV to nowhere special. ;)
Boring wikipedia article
Carbon Credit collapse
Feel like throwing money away? Buy now!!