The Climate Trust | Glossary of Common Terms

Glossary of Common Terms

There is a shared language and agreed upon catalogue of terminology necessary to operate in carbon markets. If you’re looking to get oriented in this space, let The Climate Trust help you with this glossary of common carbon market related terms.

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  • Additionality

    The reduction, avoidance, or sequestration of greenhouse gas emissions – being over and above what would have occurred without the project as a direct incentive for reductions – in addition to the baseline. For example, a reduction would be non-additional if it were the result of a regulatory mandate (e.g. landfills are required to flare gas for safety reasons making the net climate benefit nonadditional).


  • Afforestation

    Planting of new forests on lands that have not been recently forested.


  • Baselines

    The establishment of the amount of greenhouse gas emissions that would take place at a facility under normal operations without a reduction project being put into place, in other words, the amount of emissions resulting from a business-as-usual scenario in the absence of an offset project.


  • Baseline Emissions

    Emissions that would occur without project implementation (in a business-as-usual scenario). Baseline estimates are needed to determine the effectiveness of emissions reduction programs.


  • Biogas

    Gas or liquid fuel made from organic wastes such as livestock manure, agro-industrial waste, or post-consumer food waste that can be combusted in an electric engine, automobile, or sent via pipeline and combusted by an end-user (e.g. gas-fired furnace).


  • Business As Usual

    Existing and/or future energy consumption and greenhouse gas emissions in the absence of an offset project.


  • California Carbon Offsets (CCOs)

    CCOs are one metric carbon dioxide equivalent reductions from offset projects that have been third party verified and issued by the California Air Resources Board (see Standard). There are two types of CCOs: i) CCO8s which have an 8 year invalidation period; and ii) CCO3s which have a 3 year invalidation period. Invalidation implies that the Air Resources Board can revoke the offset up to 8 years after it has been issued if the project fails to comply with Environmental, Health and Safety Laws, there was a material misstatement (i.e overcounting), or double counting of offsets.


  • Carbon Sequestration

    The uptake and storage of carbon. Trees and plants, for example, absorb carbon dioxide, release the oxygen, and store the carbon. Fossil fuels were at one time biomass and continue to store the carbon until burned.


  • Carbon Sinks

    Carbon reservoirs and conditions that take in and store more carbon (i.e., carbon sequestration) than they release. Carbon sinks can serve to partially offset greenhouse gas emissions. Forests and oceans are large carbon sinks.


  • Climate Reserve Tonnes (CRTs)

    CRTs are one metric carbon dioxide equivalent reductions from offset projects that have been third party verified and issued by the Climate Action Reserve (see Standard).


  • Co-Benefits

    Additional environmental, health, and socioeconomic benefits that arise from offset projects in addition to the greenhouse gas emissions benefit. For example, a policy to reduce greenhouse gas emissions might reduce the combustion of coal, but when coal combustion is reduced, so too are the emissions of particulates and sulfur dioxide. The benefits associated with reductions in emissions of particulates and sulfur dioxide, are the co-benefits of reductions in carbon dioxide.


  • Emission Reductions Purchase Agreement

    A contractual agreement between a project sponsor/implementer and an offset purchaser, whereby the offset purchaser promises to provide offset funding to the project sponsor/implementer and, in return, the project sponsor/implementer transfers all (or a portion of) rights and ownership of the project’s emission reductions to the offset purchaser.


  • Emission Reduction Tonnes (ERTs)

    ERTs are one metric carbon dioxide equivalent reductions from offset projects that have been third party verified and issued by the American Carbon Registry (see Standard).


  • Greenhouse effect

    The effect produced as greenhouse gases allow incoming solar radiation to pass through the Earth’s atmosphere, but prevent part of the outgoing infrared radiation from the Earth’s surface (and lower atmosphere) from escaping into outer space. This process occurs naturally and has kept the Earth’s temperature about 59 degrees F warmer than it would otherwise be. Current life on Earth could not be sustained without the natural greenhouse effect.


  • Greenhouse gas

    A gas that contributes to the natural ‘greenhouse effect’. The Kyoto Protocol covers a basket of six greenhouse gases produced by human activities: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. An important natural greenhouse gas that is not covered by the protocol is water vapor.


  • Greenhouse Gas Emissions Benefit

    The total amount of the reduction, avoidance, or sequestration of a greenhouse gas, calculated in a reliable and replicable manner.


  • Leakage

    The extent to which events occurring outside the project boundary tend to reduce a project’s emissions reduction benefit. For example, avoiding deforestation in one place might lead to acceleration in deforestation in some other place. This can apply to all types of offset projects.


  • Metric ton of carbon dioxide equivalent offsets

    One metric ton (2,205 pounds or 1.1 short tons) of carbon dioxide equivalent avoided, sequestered, or displaced. This is the base unit for emissions accounting, offsets and carbon allowances. Any reference to tons infers metric tons of carbon dioxide equivalent.


  • Monitoring and Verification Plan

    Emission reductions from offset projects must be accurately quantified and verified. Each project must have a monitoring and verification plan specific to that particular project that defines how, when, and by whom the quantification and verification will be done. To ensure proper quantification and verification methodologies, the plans are most often written with the help of experts familiar with the specifics of a project.


  • Offsets

    The results of a specific project or action implemented to avoid, sequester or displace greenhouse gas emissions.


  • Permanence

    Offset projects must permanently avoid, sequester or displace emissions, rather than temporarily sequester them.


  • Protocol

    A protocol dictates the offset project design and operating characteristics a project must adhere to in order to generate certified offsets.


  • Reforestation

    Replanting of forests on lands that have recently been harvested.


  • Renewable Energy

    Energy obtained from sources that are essentially inexhaustible, unlike fossil fuels which exist in a finite supply. Renewable sources of energy include wood, waste, geothermal, wind, photovoltaic, and solar thermal energy.


  • Renewable Energy Certificates (RECs)

    RECs represent 1 megawatt-hour of renewable energy from a qualified source. Carbon emission reductions are implied in RECs, but the reductions are the result of displacing fossil fuel sources of electricity in the grid. Biogas renewable energy projects are generally eligible to produce RECs and offsets, the latter which are the result of destroying methane prior to the electricity entering the grid where the REC is generated.


  • Replicability

    The ease with which a project can be replicated.


  • Standard

    A Standard is a body that establishes offset project certification standards and protocols for different offset project types. Examples of standards are American Carbon Registry, California Air Resources Board, Climate Action Reserve, and Verified Carbon Standard.


  • Verified Carbon Units (VCUs)

    VCUs are one metric carbon dioxide equivalent reductions from offset projects that have been third party verified and issued by the Verified Carbon Standard (see Standard).


  • Verified Emission Reductions (VERs)

    VERs represent metric ton carbon dioxide equivalent emission reductions from a third party auditor from a project.