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CARBON FINANCE FOR SUSTAINABLE DEVELOPMENT |
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ACRONYMS & GLOSSARY |
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Additionality: A crucial feature of an approved Clean Development Mechanism carbon project is that without the incentive provided by emission reductions credits, the project would not occur. This concept is known as "additionality," and it is intended to avoid giving credits to projects that would have happened anyway. Annex I countries: Developed countries with emission reduction commitments, as defined in the Kyoto Protocol. Carbon credit: Generic term for an allowance to emit one tonne of carbon dioxide equivalent. Cap-and-trade: Approach used to control pollution by providing economic incentives for achieving reductions in emissions. A central authority (usually a government or international body) sets a limit (or cap) on the amount of a pollutant that can be emitted. A cap-and-trade market allows an organization that reduces its emissions below its cap to sell those surplus reductions to organizations that cannot reduce emissions as cost effectively. This enables those who can reduce pollution cheaply to earn a return on their pollution reduction investment by selling extra allowances, and enables those who can't reduce pollution as cheaply to purchase allowances at a lower cost than the cost of reducing their own emissions. It enables all participants to cost-effectively meet the total emissions cap. Furthermore, it incentivizes all emitters to innovate to find the least-cost solutions for total pollution control. TOP > CDM, Clean Development Mechanism: Mechanism introduced by the Kyoto Protocol governing project-level carbon credit activities between developed (Annex I) and developing (non-Annex 1) countries. It was designed to assist developing countries achieve sustainable development by permitting developed countries to receive emission reduction credits for financing greenhouse gas emission reduction projects in developing countries. TOP > CER, Certified Emission Reduction: Carbon credit from a CDM project, expressed in tonnes of CO2 equivalent (tCO2e). TOP > CO2, carbon dioxide: The most common greenhouse gas. TOP > CO2e, Carbon dioxide equivalent: Is the reduction unit used in the Kyoto Protocol. Considered the universal unit of measurement used to indicate the global warming potential of each of six greenhouse gases. Carbon dioxide--a naturally occurring gas that is also the by-product of burning fossil fuels and biomass, land-use changes, and other industrial processes--is the reference gas against which other greenhouse gases are measured. TOP > (First) Commitment Period 2008-2012: The period when developed (Annex I) countries must show, in the aggregate, a reduction in their emissions to roughly 5 percent below 1990 levels. TOP > Compliance markets: Emissions trading schemes and projects resulting from countries' need to meet or comply with their regulated limit to carbon emission ("cap"), promoted through and governed by the United Nations Framework Convention on Climate Change. TOP > DNA, Designated National Authority: Climate change focal point that approves CDM projects in the project host country. TOP > DOE, Designated Operational Entity: Organization accredited by the EB for validating and verifying CDM projects. TOP > EB, Executive Board of the CDM: International authority that supervises the registration of CDM projects and CDM related procedures. TOP > ERPA, Emission Reduction Purchase Agreement: Contractual agreement for the purchase of CERs or ERUs. TOP > EUA, European Allowance: Carbon credits created as a tradable commodity under the EU ETS, expressed in tonnes of CO2 equivalent. TOP > EU ETS, European Union Emissions Trading Scheme: Cap-and-trade scheme for carbon dioxide emissions from major industrial sectors within the EU. TOP > ERU, Emission Reduction Unit: Carbon credit from a Joint Implementation project, expressed in tonnes of CO2 equivalent (tCO2e). TOP > GHG, greenhouse gases: Any gas that absorbs infrared radiation in the atmosphere. Greenhouse gases include, but are not limited to, water vapor, carbon dioxide (CO2), methane (CH4 ), nitrous oxide (N2O), hydrochlorofluorocarbons (HCFCs), ozone (O3), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). These gases trap heat in the atmosphere and are responsible for current average global temperature, climate change and global warming. They are released naturally and by human activities. TOP > GIS, Green Investment Scheme: A scheme to promote the environmental effectiveness of emission reduction projects by earmarking revenues for environmental-related purposes. TOP > Host Country: The country where an emission reduction project is physically located. TOP > JI, Joint Implementation: Mechanism introduced by the Kyoto Protocol governing project-level carbon credit activities between Annex I countries. TOP > KP, Kyoto Protocol: International legal agreement under which developed countries commit to reduce greenhouse gas emissions. TOP > MDGs, Millennium Development Goals: Eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000. TOP > Non-Annex I countries: Developing countries without emission reduction commitments, as defined in the Kyoto Protocol. TOP > ODA, Official Development Assistance: Development aid from developed to developing countries. TOP > PDD, Project Design Document: Document that needs to be prepared and submitted to the Executive Board in order to register a CDM project. TOP > PIN, Project Idea Note: Preliminary CDM feasibility study; not a statutory part of the CDM process, but often produced to facilitate host country approval and/or financing of a project. TOP > tCO2e, tonnes of carbon dioxide equivalent: Common unit for carbon credits. TOP > UNCED, United Nations Conference on Environment and Development: International conference at Rio de Janeiro in 1992, at which UNFCCC was signed. TOP > UNEP, United Nations Environment Programme: United Nations body dealing with matters regarding the environment. TOP > UNFCCC, United Nations Framework Convention on Climate Change: International legal instrument to address climate change, signed in 1992.TOP > VER, Verified Emission Reduction or Voluntary Emission Reduction: (n.b. two separate meanings) Carbon credit that has been verified by an independent third party, but not otherwise approved under the Kyoto Protocol. Carbon credit created specifically for the voluntary offset market. TOP > VM, Voluntary Market: The Market for emission reductions purchased by organizations wishing to offset their carbon footprint on a voluntary basis. TOP > |
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