Glossary
The carbon market is a complex and quickly growing part of the world economy with the ultimate goal of mitigating climate change.
Carbon offsets are a financial instrument aimed at a reduction in greenhouse gas emissions. Carbon offsets are measured in metric tons of carbon- dioxide-equivalent (CO2e) and may represent six primary categories of greenhouse gases. One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases.
There are two markets for carbon offsets. In the larger, compliance market, companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of carbon dioxide they are allowed to emit. In the much smaller, voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources.
Some key terms to familiarize yourself with the carbon market include:
CCBA: The Climate, Community and Biodiversity Alliance is a unique partnership among research institutions, corporations and non-governmental organizations (NGOs). The CCBA is made up of Members, Advising Institutions and CCB Standards Sponsors. The Members founded the CCBA and contributed to the development of the CCB standards with financial support from the CCB Standards Sponsors. The independent Advising Institutions facilitated the revision of the draft Standards based on public comments and field-testing.
CDM: The Clean Development Mechanism is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment (called Annex 1 countries) to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries.
GHG: Greenhouse Gases are gases in an atmosphere that absorb and emit radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The main greenhouse gases in the Earth’s atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone.
REDD: Reducing Emissions from Deforestation and Forest Degradation mechanisms use financial incentives to reduce the emission of greenhouse gases from deforestation and forest degradation. While initially excluded from the land use, land-use change and forestry sector within the UNFCCC Clean Development Mechanism, REDD is expected to be part of the successor to the Kyoto Protocol in Copenhagen 2009. REDD credits offer the opportunity to utilize funding from developed countries to reduce deforestation in developing countries.
SGS: Société Générale de Surveillance (currently known as SGS S.A), together with its subsidiaries and joint ventures, provide inspection, verification, testing and certification services. With more than 55,000 employees, SGS operates a network of over 1,000 offices and laboratories around the world. Within the verification services arm of the company, SGS ensures that reforestation and forestry products and services comply with global standards and local regulations.
CER: Certified Emission Reductions are carbon credits issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified by a DOE under the rules of the Kyoto Protocol. CERs can be used by Annex 1 countries in order to comply with their emission limitation targets or by operators of installations covered by the European Union Emission Trading Scheme (EU ETS) in order to comply with their obligations to surrender EU Allowances, CERs or Emission Reduction Units (ERUs) for the CO2 emissions of their installations. CERs can be held by governmental and private entities on electronic accounts. CERs are either long-term (lCER) or temporary (tCER), depending on the likely duration of their benefit. transferred CERs into the accounts of some
UNFCCC: The United Nations Framework Convention on Climate Change is an international environmental treaty produced at the United Nations Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro from 3 to 14 June 1992. The treaty is aimed at stabilizing greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.
VCS: The Voluntary Carbon Standard is a quality standard for voluntary carbon offset industry. Based on the Kyoto Protocol’s Clean Development Mechanism, VCS establishes criteria for validating, measuring, and monitoring carbon offset projects.
VERs: A voluntary emission reduction is an emission reduction that has been achieved outside of compulsion. In other words, the person carrying out the activity was not obliged to do so but choose to do so voluntarily. ‘Voluntary Emissions Reductions (VERs) are carbon credits developed by carbon offset providers which are not certified. ertification of carbon credits (Certified Emissions Reductions) are backed by an international framework and institutions, for example under the UN’s Clean Development Mechanism, to ensure that real greenhouse gas emission reductions take place, as well as providing a clear audit trail. Voluntary offset schemes can be defined as those aimed at generating GHG emissions reductions not required by Kyoto Protocol’s derived regulation. Through these schemes, industries and individuals voluntarily compensate their emissions or provide an additional contribution to mitigating climate change.
