Carbon Credit Glossary

Question 1

Additionality

Answer 1

Additionality refers to carbon offset benefits that would not have happened on their own accord, i.e. without the effect of carbon financing. A project that “saves” a forest that was not credibly under threat is a project that does not demonstrate additionality.

Question 2

Carbon Credit

Answer 2

A carbon credit is a unit of measure generated from a specific project activity that destroys, sequesters or avoids greenhouse gas (GHG) emissions. One credit is equivalent to 1 Mt (metric tonne) of greenhouse gas emissions. A carbon credit and a carbon offset are effectively equivalent, i.e. different terms for the same thing.

Question 3

Carbon

Answer 3

A euphemism to describe the amount of carbon dioxide (CO2) and all GHG, or greenhouse gas emissions, in the atmosphere. Often used as an umbrella term that includes not just carbon dioxide (CO2), but other greenhouse gasses

Question 4

Cap and Trade

Answer 4

Governments or companies are given emission targets (caps) and can purchase tradable emissions allowances to compensate for going over a cap.

Question 5

Carbon Footprint

Answer 5

The total amount of greenhouse gases that are emitted into the atmosphere each year by a person, family, building, organization or company.

Question 6

Carbon Market

Answer 6

A carbon market refers to the buying and selling of GHG, or greenhouse gas emissions, worldwide. The overall carbon market consists of two submarkets: 1) a compliance market guided by government regulation and multinational agreements, and 2) a voluntary market typically utilized by businesses and individuals seeking to offset their carbon impact.

Question 7

Carbon Permit

Answer 7

A permit gives its holder the right to pollute up to a certain level.

Question 8

Clean Development Mechanism (CDM)

Answer 8

The system established under the Kyoto Protocol through which countries meet emissions targets by purchasing carbon credits that fund sustainable development projects.

Question 9

Co-benefits

Answer 9

The economic, social, and climate benefits found in a single policy or measure created to address climate change.

Question 10

Commodity Broker

Answer 10

An entity that buys and sells carbon credits that are not yet retired. They collect a margin on the sale of this service.

Question 11

Compliance Market

Answer 11

The compliance market refers to the regulatory framework established by governments and multinational agreements to legally limit how many metric tons of greenhouse gasses businesses within their jurisdiction can emit.

Question 12

Emissions Obligation

Answer 12

Total amount of annual CO2 emissions from a company that are regulated under the California cap-and-trade system.

Question 13

Gold Standard

Answer 13

A certification standard for offset projects in countries that don’t have emission reduction targets under the Kyoto Protocol.

Question 14

Greenhouse Gas (GHG)

Answer 14

Stands for greenhouse gas. These gases include CO2 (carbon dioxide), CH4 (methane), N2O (nitrous oxide), HFCs (hydrofluorocarbons), PFCs (perfluorocarbons), and SF6 (sulfur hexafluoride).

Question 15

Greenhouse Gas Effect

Answer 15

Is caused when GHG, or greenhouse gases, get trapped by the Earth’s atmosphere and retain heat.

Question 16

Guarantees of Origin (GO)

Answer 16

The European Union mandate that all member states must disclose to consumers the proportion of their electricity consumption that is generated from renewable energy.

Question 17

Greenhouse Gas Registry

Answer 17

A public listing platform for recognizing businesses that have reported third-party verified GHG, or greenhouse gas, inventories, as well as reduced emissions.

Question 18

Kyoto Protocol

Answer 18

The United Nations protocol ratified in 1997 that established carbon emission reduction targets for participating nations

Question 19

Project Design Document (PDD)

Answer 19

An essential technical document that outlines a carbon credit project’s strategy and methods.

Question 20

Project Protocol

Answer 20

A document published by the Greenhouse Gas Registry. A carbon project developer will follow the methodology and meet all the criteria specified in the project protocol.

Question 21

Quantification

Answer 21

In this regard, this addresses the number of tonnes of GHG, or greenhouse gas.

Question 22

Real

Answer 22

The project exists and the credits represent measurable reductions in greenhouse gases.

Question 23

REC

Answer 23

Stands for Renewable Energy Certificate

RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource

Question 24

REDD+

Answer 24

Stands for Reduce Emissions from Deforestation and Forest Degradation and is an international framework to both stop the destruction of forests and to implement forest management programs.

Question 25

Registered

Answer 25

Carbon Credits can be used only once and must be registered with a unique serial number.

Question 26

Registry

Answer 26

Is a third-party program to verify, account for, measure, and collect data for GHG, or greenhouse gas, emissions to be traded on the carbon market.

Question 27

Regulatory Offsets

Answer 27

Offsets purchased to fulfill a regulated emissions cap.

Question 28

Reseller

Answer 28

Is similar to a commodity broker, but on a smaller scale. A reseller sells to the end-user.

Question 29

RNG Programs

Answer 29

Stands for Renewable Natural Gas RNG is a program giving gas customers a choice to purchase a percentage of their usage as natural gas, which is produced from biomass, and is interchangeable with liquified petroleum gas.

Question 30

SDG

Answer 30

Stands for Sustainable Development Goals is a list of 17 goals, as laid out by the United Nations, for a more sustainable future. Of the 17, four are climate-related, including climate action.

Question 31

TIGR

Answer 31

Stands for Tradable Instrument for Global Renewables is an online platform from which to track and trade RECs in Asia, Africa, and the Americas.

Question 32

Validation

Answer 32

At the beginning stages, validation is a process of having a qualified accredited third-party audit of a carbon project. This assures that the project meets the GHG, or greenhouse gas, program criteria.

Question 33

Verified Carbon Standard (VCS)

Answer 33

A standard for certifying carbon emission reductions that is managed by the nonprofit Verra.

Question 34

VOC

Answer 34

Stands for Volatile Organic Compound Are organic man-made chemicals that impact indoor air quality and may pose health risks. A VOC is not a GHG. VOC’s are often found in building materials, home and personal products, and activities such as smoking cigarettes or burning wood.

Question 35

Voluntary Offsets

Answer 35

Offsets purchased for any other reason like a corporate sustainability program.

Question 36

WRC

Answer 36

Stands for Water Restoration Certificate Is a certificate confirming the purchase of 1,000 gallons of water to offset water usage and restore critical rivers or streams, particularly at times when water is needed the most.