glossary of terms

CLIMATE CHANGE:

why take action

CARBON OFFSETTING:

how does it work?

CARBON RESELLER:

learn more about the benefits

LEGISLATION:

you and the law

Additionality	To avoid giving credits to projects that would have happened anyway, rules have been specified to ensure additionality of the project i.e. to ensure the project reduces emissions more than would have occurred in the absence of the project. A project is additional if its proponents can document that realistic alternative scenarios to the proposed project would be more economically attractive or that the project faces barriers that carbon finance helps it overcome.
Annex 1 Countries	These are the industrialised countries that have targets to reach under the Kyoto Protocol.
Biomass Energy	As trees and plants grow, they absorb CO₂ from the atmosphere; in many places around the world this biomass is burnt to provide energy. If the biomass is cut and cannot or does not re-grow, then it is being harvested unsustainably and may be described as non-renewable. If this is the case the CO₂ released in combustion makes a net addition to concentrations in the atmosphere. However, if the plants grown for energy are replanted, then the process is renewable - the plants absorb CO₂ one year, it is released again when it is burnt, absorbed again the following year and so on.
'Business-as-usual' scenario	A description of what would most likely have occurred in the absence of a carbon offset project, also referred to as the 'baseline scenario'.
Carbon dioxide (CO₂)	A naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes.
Carbon dioxide equivalent (CO₂e)	The unit of measurement used to compare the relative climate impact of the different greenhouse gases. The CO₂e quantity of any greenhouse gas is the amount of carbon dioxide that would produce the equivalent global warming potential.
Carbon footprint	A carbon footprint is the total set of greenhouse gas (GHG) emissions caused by an organisation, event or product. For simplicity of reporting, it is often expressed in terms of the amount of carbon dioxide, or its equivalent of other GHGs, emitted.
Carbon Funding or Finance	Is where an investor pays a project developer in return for ownership of the emissions reductions achieved by that project over a certain time period. Funding may be provided as capital at the start of a project, as income over its life or as a mixture of the two.
Carbon neutral	Carbon neutrality, or having a net zero carbon footprint, refers to achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered, avoided or offset.
Carbon offset	Carbon offsets are the 'currency' for offsetting. They are quantified in metric tonnes of CO₂e reductions, i.e. one carbon offset equals one tonne of emissions reductions made through selected and verified carbon projects. Carbon offsets can be purchased on a voluntary basis or to meet regulatory requirements.
Carbon offset project	A third party verified project which utilises proven clean technologies including, hydropower, wind power and methane capture, to generate carbon offsets.
Carbon offset standard	A standard that helps to ensure that carbon offset projects meet certain quality requirements, such as additionality and third party verification. Several offset standards exist within the voluntary and compliance carbon markets and each has a different set of requirements depending on its focus and scope.
Certified emission reduction (CER)	Certified Emission Reduction - a carbon credit created by a Clean Development Mechanism (CDM) project. One CER corresponds to one tonne of CO₂e emission reductions. CERs are issued by the CDM Executive Board once a project has been validated and the emission reductions themselves have been verified. They can then be used by governments towards their Kyoto targets or by companies to trade in the EU Emissions Trading Scheme. The purchasing company surrenders the CERs to government as part of the company's emissions target.
Clean Development Mechanism (CDM)	The CDM allows Annex 1 countries that have targets under the Kyoto Protocol to make emission reductions overseas in non-Kyoto countries and count those reductions towards their own legal commitments. A CDM project is issued with Certified Emission Reductions, which may then be traded.
Climate change	A change in global climate attributed directly or indirectly to human activity and in addition to natural climate variability observed over comparable time periods.
Compliance carbon market	The segment of the carbon market for carbon offset transactions which meet regulatory requirements i.e. offsets purchased by governments and organisations to meet Kyoto targets.
Double counting	When two or more individuals or organisations claim ownership of specific emission reductions or carbon offsets.
EU Emissions Trading Scheme	The EUETS started in January 2005. The main participants in the scheme are large industrial users of energy who are allocated a maximum emissions cap by the government. Companies that reduce emissions below this cap may sell emission reductions to those who have exceeded their targets thereby ensuring that emission reductions are made in a cost effective manner across the economy.
Global warming	The increase in the average temperature of the Earth's surface as a result of the accumulation of greenhouse gases in the atmosphere
Global Warming Potential (GWP)	The GWP is used to compare the abilities of different greenhouse gases to trap heat in the atmosphere. GWPs are based on the radiative efficiency (heat-absorbing ability) of each gas relative to that of carbon dioxide (CO₂), as well as the decay rate of each gas (the amount removed from the atmosphere over a given number of years) relative to that of CO₂. The GWP provides a construct for converting emissions of various gases into a common measure, which allows climate analysts to aggregate the radiative impacts of various greenhouse gases into a uniform measure denominated in carbon or carbon dioxide equivalents.
Gold Standard	This is awarded to CDM and voluntary projects that have higher sustainable development credentials than required by the CDM rules. The Gold Standard (GS) was set up by a group of environmental NGOs who wanted to encourage developers to run high quality projects. The GS board run a GS VER accreditation scheme for the voluntary market.
Greenhouse Gases (GHG)	Greenhouse gases (GHGs) are those that contribute to the 'greenhouse effect', trapping heat from the sun in the earth's atmosphere. Carbon dioxide is the main greenhouse gas, but there are a number of others including methane (CH4) and Nitrous Oxide (N2O).
Joint Implementation	In essence Joint Implementation (JI) is similar to the CDM approach except that the project is run in another Annex 1 country that has a target under the Kyoto Protocol.
Kyoto Protocol	Following the original Earth Summit in Rio de Janeiro in 1992 the United Nations Framework Convention on Climate Change (UNFCCC) was introduced and has now been ratified by over 140 countries. In 1997, at the fourth Conference of the Parties to the Convention, (often referred to as 'COP 4'), the Kyoto Protocol was signed. This laid out the targets for the industrialised countries to reduce their greenhouse gas emissions. The Kyoto Protocol was ratified by the required number of countries in February 2005 and came into force. This means that in the five years between 2008 and 2012 the UK has to reduce its greenhouse gas emissions, on average, to 12.5% below what they were in 1990. Each country has a different target, but the total emission reductions amount to 5.7% below 1990 levels.
Leakage	When an emission reduction from a carbon offset project in one area causes an increase in emissions somewhere outside of the project scope i.e. where conserving a forest in one region shifts logging activity to another area of forest.
Permanence	An offset quality criteria which relates to the robustness and durability of the emission reduction generated by a carbon offset project.
Radiative Forcing Index	Radiative Forcing is the change in radiation received at the surface of the earth due to the emission of greenhouse gas(es). The Radiative Forcing Index equates this to the effect of a similar quantity of CO₂. RFI is usually used in relation to aviation. It is similar to GWP, except that it is not integrated over time. The two are often used interchangeably but it is incorrect to do so.
Registry	A publicly accessible database that tracks ownership of carbon offsets over their lifetime.
Retire	To permanently remove carbon offsets from market to ensure that they are not re-sold. Offsets are usually retired by giving them individual serial numbers and placing them in an official registry.
The Carbon Trust	Is a not for profit company set up by the UK Government in 2001. Its purpose is to advise businesses on how to reduce the amount of energy they use. The Carbon Trust works with both large and small companies. For more information visit the Carbon Trust website.
UK Emissions Trading Scheme	In 2002 33 companies voluntarily took on a legally binding obligation to reduce their emissions and began trading under this DEFRA scheme. Companies with Climate Change Levy Agreements can also buy and sell credits in the scheme to help them achieve their targets.
Unique ownership	The concept of clear ownership rights to the emission reductions that a carbon offset represents, to avoid more than one individual or organisation claiming the benefit of the reduction. See double counting and retire.
United Nations Framework Convention on Climate Change (UNFCCC)	See Kyoto Protocol.
Validation	An independent assessment of the carbon offset project design and baseline calculations by an accredited third-party auditor that takes place before the project activity is underway.
Verification	An independent assessment of quantification of actual emission reductions achieved by a carbon offset project, carried out by an accredited third-party auditor after the project is underway.
Verified emission reduction (VER)	Verified Emission Reductions (VER) - a carbon credit created by a project which has been verified outside of the Kyoto Protocol. One VER corresponds to one tonne of CO₂e emission reductions. Also referred to as Voluntary Emission Reductions.
Vintage	The corresponding year in which the emission reductions that a carbon offset represents were created.
Voluntary carbon market	The segment of the carbon market for carbon offset transactions outside of government-related regulatory schemes i.e. offsets purchased by organisations wishing to offset their carbon on a voluntary basis.