Carbon Credits Glossary

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.

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.

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.

Where members are legally obligated to reduce their emissions.

A Kyoto Protocol unit 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.

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.

Unlike a carbon offset, which represents one tonne of CO2e emissions reduction, a renewable energy credit represents one MWh of energy produced by a renewable energy source, such as solar, wind, or hydroelectric power.

To permanently remove carbon offsets from the market in order to prevent them from being resold after they’ve been used up. Offsets are typically decommissioned by assigning them unique serial numbers and registering them in an official registry.