Question 1

What is an additional offsets?

Accepted Answer

Carbon offsets that would not have occurred if the offset project had not been implemented. (This is one of four factors to consider when acquiring carbon offsets.)

Question 2

What is an afforestation?

Accepted Answer

Planting of new woods on places that had previously been devoid of trees.

Question 3

What is anthropogenic?

Accepted Answer

Caused by humans. The current scientific consensus states that global warming is a direct result of the sharp rise in anthropogenic emissions of greenhouse gases.

Question 4

What is a biofuel?

Accepted Answer

A biomass-derived fuel, usually in liquid form. Bioethanol from sugarcane or maize, biodiesel from canola, soybeans etc.

Question 5

What is a biomass?

Accepted Answer

Organic material from living or recently dead plants or animals.

Question 6

What is a blue carbon

Accepted Answer

Blue carbon is the carbon absorbed and deposited in biomass and sediments by living organisms in coastal (e.g., mangroves, salt marshes, seagrasses) and marine environments.

Question 7

What is California cap-and-trade scheme?

Accepted Answer

The California Cap and Trade Program is administered by the Western Climate Initiative (WCI) and controlled by the California Air Resources Board. This program began in 2012 with California and subsequently was linked to similar emissions programs from the Canadian provinces of Quebec, and briefly, Ontario as well. Both jurisdictions' allowances can be used for compliance. The cap and trade scheme includes major electric power plants, large industrial plants, and gasoline distributors, among other sectors.

Question 8

What is cap and trade?

Accepted Answer

A regulatory procedure that puts a "cap" on the amount of greenhouse gas emissions that companies are permitted to emit. Firms that come in under their limitations have the option to "trade" (sell) their excess emission permits to other companies that have exceeded their limit.

Question 9

What is carbon allowances?

Accepted Answer

Permissions (credits) to release greenhouse gases for participants in a controlled carbon market.

Question 10

What is a carbon border?

Accepted Answer

Middlemen who do not hold offsets but enable transactions between project developers and end-users, merchants, and/or retailers.

Question 11

What is a carbon budget?

Accepted Answer

The maximum amount of CO2 that the world can release while still having a good probability of keeping warming below the 2°C goal laid out in the Paris Agreement.

Question 12

What is a carbon calculator?

Accepted Answer

An online tool that calculates your carbon footprint based on your home energy use, driving and flying habits, food, trash, recycling, and other factors.

Question 13

What is Carbon Capture and Sequestration (CCS)?

Accepted Answer

A process that separates (captures) a reasonably pure stream of carbon dioxide (CO2) from industrial and energy-related sources, conditions it, compresses it and transports it to a storage site for long-term isolation from the atmosphere (sequestration). Carbon capture and storage is another term for it.

Question 14

What is Carbon Capture, Utilization, and Storage (CCUS)?

Accepted Answer

A method of capturing CO2 and then using it to create a new product. Carbon capture, utilization, and storage occurs when CO2 is stored in a product for a climate-relevant time horizon. Only when coupled with CO2 that has recently been removed from the atmosphere does CCUS lead to carbon dioxide removal.

Question 15

What are carbon credits?

Accepted Answer

Equal to the offsetting of one tonne of carbon dioxide or carbon dioxide equivalent. A monetary value is ascribed to the reduction or offset of greenhouse gas emissions; this is a general term for any tradable certificate or permit reflecting emissions reductions.

Question 16

What is carbon cycle?

Accepted Answer

For as far back as geological evidence shows – at least 650,000 years – the Earth's natural carbon cycle has maintained a steady equilibrium of carbon dioxide in the atmosphere - around 275 parts per million (ppm). We discovered this by examining the contents of Antarctic ice cores. As a result of the natural carbon cycle: People and animals (source) use respiration to turn oxygen into carbon dioxide. Plants (sinks) absorb CO2 and release it back into the atmosphere. Over the seas, oceans both produce (source) and absorb (sink) carbon dioxide. Dead organic matter traps carbon underground in various forms such as fossil fuels (sink), while volcanic eruptions (source) can release CO2 from carbonate rocks deep inside the Earth.

Question 17

What is carbon dioxide?

Accepted Answer

A heat-trapping gas that is composed of two parts oxygen and one part carbon. Too much CO2 in our atmosphere causes the Earth to retain too much of the sun's heat, leading to global warming. And excessive global warming eventually leads to various complications that are detrimental to our planet and its inhabitants, such as rising sea levels or certain areas becoming too hot for humans to live in.

Question 18

What is Carbon Dioxide Equivalent (CO2e or CO2eq)?

Accepted Answer

The globally accepted standard measure of greenhouse gas emissions permits other greenhouse gas emissions to be represented in terms of CO2 based on their proportional global warming potential (GWP). It includes 7 major gases namely: CO2, methane, nitrous oxide, hydroflourocarbons, perfluorocarbon, sulfur hexafluoride, and nitrogen trifluoride. Each of the above seven gases was to be mitigated under the Kyoto Protocol, and this objective has been carried forward under the Paris Agreement.

Question 19

What is carbon footprint?

Accepted Answer

The quantity of carbon dioxide emitted into the atmosphere as a result of any given entity’s actions. Individuals, corporations, and even nations can have a carbon footprint.

Question 20

What is carbon market?

Accepted Answer

A marketplace that treats emissions reductions as a commodity, where participating members can buy and sell carbon credits.

Question 21

What is carbon neutral?

Accepted Answer

Often known as having a net zero carbon footprint, this is achieved by either reducing carbon emissions to zero, or by balancing a measurable quantity of carbon emitted with an equivalent amount offset.

Question 22

What are carbon offsets?

Accepted Answer

Also known as VERs (voluntary emission reductions), CRTs (carbon reduction tonnes), and ERTs (emission reduction tons/tonnes), carbon offsets represent a given amount of carbon sequestered, consumed, or otherwise removed from the atmosphere. Through a voluntary carbon market, they provide a chance for anybody to fund initiatives that decrease, avoid, eliminate, or sequester carbon dioxide.

Question 23

What is a carbon sink?

Accepted Answer

A carbon sink is any natural or man-made reservoir that collects and stores any carbon-containing chemical component for an indefinite length of time, lowering CO2 concentrations in the atmosphere. The most important carbon sink on a global scale is the ocean.

Question 24

What is carbon source?

Accepted Answer

Any source of carbon dioxide or equivalent greenhouse gases. People and animals, as well as seas and volcanic eruptions, are all natural carbon sources. Carbon emissions from human-caused sources include the use of fossil fuels, automobile exhaust, deforestation, and manufacturing, building, and mining activities.

Question 25

What is CCA futures?

Accepted Answer

A futures contract for allowances issued by the California Cap and Trade Program. Expired contracts result in physical delivery of CCA allowances to the Compliance Instrument Tracking System Service (CITSS) registry.

Question 26

What is CCO futures?

Accepted Answer

A futures contract for California Air Resources Board offset credits that may be used to meet certain compliance responsibilities under the California Cap and Trade Program. As a tangible product, contracts held to expiry result in actual delivery of California carbon offsets beyond the danger of invalidation in the CITSS register.

Question 27

What is CCS Carbon Capture and Storage?

Accepted Answer

A process that separates (captures) a reasonably pure stream of carbon dioxide (CO2) from industrial and energy-related sources, conditions it, compresses it, and transports it to a storage site for long-term isolation from the atmosphere. Carbon capture and storage is another term for it.

Question 28

What is CCU Carbon Dioxide Capture and Utilization?

Accepted Answer

A method of capturing CO2 and then using it to create a new product. Carbon dioxide collection, use, and storage occurs when CO2 is stored in a product for a climate-relevant time horizon (CCUS). Only when coupled with CO2 that has recently been removed from the atmosphere does CCUS lead to carbon dioxide removal.

Question 29

What is climate change?

Accepted Answer

As defined by the UN Framework Convention on Climate Change, climate change is: “a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods”. In other words, in most contexts, climate change refers specifically to anthropogenic climate change, and not the Earth’s natural climate cycles. This includes both global warming as well as extreme weather events.

Question 30

What is compliance carbon market?

Accepted Answer

Compliance carbon markets, also known as mandatory markets, are governed by national, regional, or provincial law and compel emission sources to meet legally mandated GHG emissions reduction targets. Because compliance program offset credits are generated and traded for regulatory compliance they typically act like, and are priced like, other commodities.

Question 31

What is COP?

Accepted Answer

The annual Conference of the Parties, also known as the United Nations Climate Change Conference. It's the decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC) and includes over 190 countries.

Question 32

What is DAC (Direct Air Capture)?

Accepted Answer

A process in which CO2 is extracted directly from the atmosphere. This CO2 can be permanently retained in deep geological formations (resulting in negative emissions), or it can be used in food processing, for example, or mixed with hydrogen to make synthetic fuels.

Question 33

What is Emission Reduction Ton (ERT)?

Accepted Answer

The reduction or removal of one metric tonne of carbon dioxide equivalent from the atmosphere (CO2).

Question 34

What is EU Emission Trading Scheme (EU ETS)?

Accepted Answer

With about 45% of EU greenhouse gas emissions covered by the EU ETS, it’s the world's largest cap and trade scheme. Emissions from heavy industry, electricity generation, and aircraft in the EU are covered by this programme, which was implemented in 2005.

Question 35

What are the extreme weather events?

Accepted Answer

Unexpected weather events and patterns that are considered extremely unusual outliers in the regions where they occur. Unexpected heat waves, such as the 2021 Western North America heat wave that set new record-high temperatures in Canada, or the February 2021 North American cold wave that caused significant damage in the state of Texas, are examples of such events. There is some evidence to suggest that climate change is causing extreme weather events to occur both more frequently as well as more severely.

Question 36

What are fossil fuels?

Accepted Answer

Fuels are derived from hydrocarbon deposits formed by fossils, such as coal, oil, and natural gas. The combustion of these products, for example in car engines or coal-fired power plants, produces greenhouse gases like carbon dioxide.

Question 37

What is global warming?

Accepted Answer

An increase in the world’s average surface temperature, as compared to a baseline reference period. The average temperature of world has increased by approximately 1°C since the late 19th century, and the scientific consensus is that human activity is the primary contributor.

Question 38

What is Global Warming Potential (GWP)?

Accepted Answer

A scientific measure that compares how harmful each greenhouse gas is to the atmosphere, in terms of how long they stay there and how much heat they trap, relative to carbon dioxide. See also: Carbon Dioxide Equivalent.

Question 39

What is Gold Standard Verified Carbon Standard (GS VER)?

Accepted Answer

A non-governmental emission reductions project certification scheme. It participates in the Clean Development Mechanism (CDM), the Voluntary Carbon Market, and many climate and development initiatives.

Question 40

What are Greenhouse Gases (GHG)?

Accepted Answer

GHG are gases that trap heat in the atmosphere. Carbon dioxide, methane, nitrous oxide, and fluorinated gases are the primary greenhouse gases. See also: Carbon Dioxide Equivalent.

Question 41

What is greenwashing?

Accepted Answer

The use of false or misleading promotion and marketing to exaggerate an organization's environmental or sustainable activities.

Question 42

What is ICE CER Futures?

Accepted Answer

Defined in the Kyoto Protocol, an ICE Certified Emission Reduction futures contract is a futures contract for a carbon offset unit that may be used to meet EU ETS compliance obligations.

Question 43

What is ICE EUA Futures?

Accepted Answer

A futures contract for permits issued by the European Union Emissions Trading System. Contracts held to expiry result in physical delivery of EUA allowances within the Union Registry.

Question 44

What is ICE Global Carbon Index?

Accepted Answer

An index based on prices from the EU Emissions Trading Scheme (EU ETS), the California Cap and Trade Program, and the Regional Greenhouse Gas Initiative (RGGI). The secondary futures market for such programs, which trade on ICE's futures exchanges, accounts for the majority of volume in all carbon-based futures contracts.

Question 45

What is ICE RGGI Futures?

Accepted Answer

The ICE Regional Greenhouse Gas Initiative futures contract is a contract for RGGI allowances. The RGGI is a collaborative program comprised of 11 northeastern U.S. states, and RGGI allowances are physically handed to the RGGI-COATS registry when contracts are held to expiry.

Question 46

What is the Kyoto Protocol?

Accepted Answer

A global accord signed in 1997 that aimed to decrease greenhouse gas emissions. The phrase "carbon credit" appeared for the first time in the Kyoto Protocol. The Kyoto Protocol would later be superseded by the Paris Agreement.

Question 47

What is Land Use Change (LUC)?

Accepted Answer

Changes in how a particular area of land is used or managed. For instance, land use change is one of the primary reasons why the Amazon rainforest has gone from being one of the world’s largest natural carbon sinks to becoming a carbon source instead.

Question 48

What is a leakage?

Accepted Answer

When a reduction in emissions from a carbon offset project in one location produces a rise in emissions in another area. For example, when preserving a forest in one region transfers logging activities to another area of forest.

Question 49

What is mandatory (compliance) market?

Accepted Answer

Mandatory (compliance) markets are governed by national, regional, or provincial law and compel emission sources to meet GHG emission reduction targets. Because compliance program offset credits are generated and traded for regulatory compliance, they typically act like other commodity pricing.

Question 50

What is a Megawatt (MW)?

Accepted Answer

A power measurement unit that is equal to one million watts. One megawatt is approximately equal to the amount of energy produced by ten car engines.

Question 51

What is Megawatt Hour (MWh)?

Accepted Answer

Equivalent to 1,000 kilowatts of continuous power consumption for one hour. It’s about comparable to the amount of power consumed by 330 households in a single hour.

Question 52

What is Net Zero?

Accepted Answer

A condition in which greenhouse gases emitted into the atmosphere are balanced by the amount of greenhouse gases being removed from the atmosphere. See also: Carbon Neutral.

Question 53

What is Netzero?

Accepted Answer

A condition in which greenhouse gases entering the atmosphere are balanced by removal from the atmosphere.

Question 54

What are offset certificates?

Accepted Answer

Paper licences that are provided in exchange for the purchase of carbon credits. Offset certificates should include a serial number unique to the offset, total tonnage bought, the verifier's name and signature, project location, owner's name and address, and a vintage date.

Question 55

What is the Paris Agreement?

Accepted Answer

An international treaty on climate change that superseded the Kyoto Protocol. Signed in 2016, the agreement has been ratified by all but six countries in the world. The long-term goal of the Paris Agreement is to keep global warming below 2°C, and the treaty contains various provisions to enforce this target.

Question 56

What is pathway?

Accepted Answer

A model scenario for climate change based on current scientific understanding. The 1.5°C pathway, as laid out by the Intergovernmental Panel for Climate Change, forecasts a 50-66% chance that global warming will remain at or below 1.5°C by the year 2100 after a brief overshoot. This pathway would require the entire world to cut greenhouse gas emissions by 7.6% each year, halving emissions by 2030 and reaching net zero status by 2050.

Question 57

What is performance standard?

Accepted Answer

Rather than limiting projects to those that wouldn’t be viable without the carbon market, the performance standard counts as offsets any energy reduction that’s less than a specified threshold. In some cases, a project may be good for the environment, but would have happened regardless, independent of assistance from the carbon market. As a result, projects with the performance standard generally aren’t as “high quality” as more rigorously certified carbon reduction projects.

Question 58

What is permanent offsets?

Accepted Answer

Offsets that are long-lasting or guaranteed to be replaced in the event of a loss. This is one of four factors to consider when acquiring carbon offsets.

Question 59

What are real offsets?

Accepted Answer

Carbon offsets that have already actually reduced carbon emissions, as opposed to those that are expected to do so in the future. This is one of four factors to consider when acquiring carbon offsets.

Question 60

What is Reduced Emissions from Deforestation and Forest Degradation (REDD+)?

Accepted Answer

Projects in areas where forests are in danger due to land-use change, resulting in reduced carbon storage. REDD+ projects aim to save these forests before they’re degraded or deforested, avoiding a worse-case scenario that leads to increased emissions.

Question 61

What is Regional Greenhouse Gas Initiative (RGGI)?

Accepted Answer

A multi-state cap and trade scheme first established in 2009. This program encompasses the 11 U.S. states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia. Each participating state has its own limitation on fossil-fuel-fired electric power plant emissions. Each state's allowances, like California's, can be utilized interchangeably for compliance.

Question 62

What is a regulated carbon market?

Accepted Answer

Where members are legally obligated to reduce their emissions.

Question 63

What is Removal Unit (RMU)?

Accepted Answer

A Kyoto Protocol unit is equal to one metric tonne of carbon dioxide equivalent emissions absorbed or removed by a carbon sink project. RMUs are granted for carbon dioxide removal from the atmosphere by qualifying land use, land use change, and forestry activities.

Question 64

What is renewable energy?

Accepted Answer

Energy derived from sources that can be naturally renewed in a relatively short amount of time. The five most common renewable sources are biomass (such as wood and biogas), hydropower, geothermal (heat from inside the earth), wind, and solar.

Carbon Credits Glossary