Carbon Credits Glossary

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There are currently 25 names in this directory beginning with the letter C.
C

California Cap and Trade Scheme
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. Visit the California Air Resources Board's summary of their cap-and-trade program here.

Cap and Trade
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.

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

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

Carbon Budget
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.

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

Carbon Capture and Sequestration (CCS)
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.

Carbon Capture, Utilization, and Storage (CCUS)
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.

Carbon Credits
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.

Carbon Cycle
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.

Carbon Dioxide (CO2)
A heat-trapping gas composed of two parts carbon and one part oxygen. 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.

Carbon Dioxide Equivalent (CO2e or CO2eq)
The globally accepted standard measure of greenhouse gas emissions, and it permits other greenhouse gas emissions to be represented in terms of CO2 based on their proportional global warming potential (GWP). The following gases are included under the term CO2e:

co2 equivalent

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.

Carbon Footprint
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.

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

Carbon Neutral
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.

Carbon Offsets
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.

Carbon Sink
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.

Carbon Source
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.

CCA Futures
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.

CCO Futures
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.

CCS Carbon Capture and Storage
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.

CCU Carbon Dioxide Capture and Utilization
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.

Climate Change
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.

Compliance Carbon Market
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.

COP
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.

Click here for details on the upcoming COP26 conference.