As humanity faces its greatest challenge, we can expect the landscape of the voluntary carbon market to further evolve, encouraging more organisations to invest in the fundamental reversal of carbon dynamics.
In support, we offer the following Carbon Market Glossary to help you navigate a series of concepts, acronyms and organisations associated with climate change, international policy, carbon markets, nature-based solutions and corporate action.
Additionality
The concept that mitigated emissions from a carbon project would not have occurred in absence of financial incentives provided by carbon finance
AFOLU – Agriculture, Forestry Other Land Uses
These sectors play a significant role in carbon dynamics, as they can act as sources or sinks of greenhouse gas emissions, making them crucial in climate mitigation and adaptation efforts
Afforestation
The development of forests on lands that were never forested or that have not been forested for a long time
APD – Avoided Planned Deforestation
An initiative to prevent legally permitted deforestation at large scale mainly caused by commercial agents for alternative land-use, such as cattle ranching or crop plantations
ARR
A carbon project term that encompasses Afforestation, Reforestation, Revegetation
Article 6
Article within the Paris Agreement outlining international cooperation on climate action, including mechanisms for countries to voluntarily trade emission mitigations and cooperate in achieving their climate goals, fostering collaboration and promoting cost-effective emission mitigation
AUD – Avoided Unplanned Deforestation
An initiative aimed at preventing or reducing deforestation that is caused by local agents such as local communities growing crops for local consumption or deforestation due to illegal logging.
Avoidance
An action that prevents additional emissions from actually occurring and entering the atmosphere
BVCM – Beyond Value Chain Mitigation
Strategies or actions implemented by organisations to reduce emissions beyond their direct operational boundaries, extending throughout their entire value chain. Aiming to address emissions associated with upstream and downstream activities, including suppliers, customers, and product lifecycle stages
Carbon Footprinting
The process of measuring the emissions associated with an organisation, product, activity, or individuals helping them to understand their impact on climate change and guide efforts to reduce emissions and promote sustainability.
Carbon Neutrality
Creating a neutral balance of greenhouse gas emissions that a company, product, event is responsible for, by measuring emissions associated and compensating for that specific amount through carbon offsets
Carbon Registry
A multifunctional third party, independent body that seeks to set and maintain standards to promote integrity and transparency in the development of carbon projects, validate projects adherence to standards and verify their ongoing adherence, and track the ownership, issuance/retirement/transfer of carbon credits generated. The main 4 bodies are Verra (VCS), Gold Standard (GS), Carbon Action Reserve (CAR) and American Carbon Registry (ACR).
Carbon stock
The total amount of carbon stored within a given ecosystem or carbon reservoir, such as forests, soils, or vegetation.
CCB – Climate, Community and Biodiversity
Managed by Verra, the CCB Standard is a set of criteria and guidelines for carbon offset projects to provide net positive benefits that address climate change, support local communities, and conserve biodiversity, ensuring multiple co-benefits beyond carbon mitigation. The standard comprises 14 required criteria with exceptional projects meeting one or more of 3 optional “gold” criteria.
CCP – Core Carbon Principles
Criteria set out by the Integrity Council of the Voluntary Carbon Market to enable its participants to more easily differentiate carbon projects of high quality. They set a minimum standard of adherence to high levels of governance, emission impact and sustainable development
CDM – Clean Development Mechanism
A project-based mechanism under the Kyoto Protocol that allows developed countries to invest in emission reduction projects in developing countries as a way to meet their emission reduction targets. It promotes sustainable development and technology transfer while reducing global greenhouse gas emissions.
CDP – Carbon Disclosure Project
A global non-profit organisation that works with companies, investors, cities, and regions to disclose their environmental impacts, including carbon emissions, climate risks, and sustainability strategies. It facilitates transparency, accountability, and action on climate change through voluntary reporting and benchmarking
CDR – Carbon Dioxide Removal
Technologies, practices, or natural processes that remove carbon dioxide from the atmosphere and store it in long-term sinks, such as oceans, forests, or geological formations.
Claims Code of Practice VCMI
A set of guidelines and standards developed for corporate and private sector actors on the demand side of the voluntary carbon market, to ensure accuracy, transparency, and reliability in carbon offset claims and communications
Compliance Market
A regulated mechanism to encourage the gradual reduction of emissions amongst obligated parties. One such example is the EU Emissions Trading Scheme, a cap-and-trade system established to encourage the reduction of emissions from carbon intensive industries. It works by setting a cap on the total amount of emissions allowed within the system and then issuing tradable allowances to companies. This incentivizes emissions reductions and provides flexibility for companies to comply with their emission targets.
Corresponding Adjustments
A carbon accounting correction made to NDCs for inter country trading of ITMOs, as established under Article 6 of the Paris Agreement, commonly referred to as ‘CA’. To avoid double counting of mitigation efforts, a selling (host) country that authorises the transfer of mitigation must exclude/subtract carbon units from its own accountancy before it can be counted in the buying (receiving) country
CORSIA – Carbon Offsetting Reduction Scheme International Aviation
A global market-based mechanism established by the International Civil Aviation Organization (ICAO) to address greenhouse gas emissions from international aviation. It aims to achieve carbon-neutral growth from 2020 onward by requiring airlines to offset their emissions through carbon credits from eligible projects
CSRD Corporate Sustainability Reporting Directive EU
EU legislation aimed at enhancing corporate transparency and accountability by mandating standardised reporting on environmental, social, and governance (ESG) issues, including climate-related disclosures.
Deforestation
The permanent conversion of forested lands into non-forest uses, such as agriculture, urbanisation, or infrastructure development. It leads to the loss of carbon sinks, biodiversity, and ecosystem functions, contributing to greenhouse gas emissions and climate change.
ESG – Environmental Social Governance
A set of criteria used to evaluate a company’s performance on environmental, social, and governance issues. It assesses factors such as carbon footprint, labour practices, diversity, and corporate governance to measure the sustainability and ethical impact of investments.
EU Green Claims Directive
An EU directive that aims to protect consumers from greenwashing by preventing the use of false or misleading claims. It requires companies to substantiate the voluntary green claims they make in business-to-consumer commercial practices.
Greenwashing
The deceptive or misleading practices adopted by organisations to portray themselves or their products as environmentally friendly or sustainable, or to overstate the impacts of their compensation efforts, often exaggerating their environmental credentials or downplaying negative impacts.
ICVCM – Integrity Council for the Voluntary Carbon Market
An independent body that seeks to scale the voluntary carbon market by enabling participants in the market to more easily identify high-quality carbon credits through the identification of Core Carbon Principles.
IETA – International Emissions Trading Association
A global organisation representing businesses and industries engaged in carbon trading. It promotes the development of transparent, efficient, and market-based solutions for carbon emissions reduction and trading.
IPCC – Intergovernmental Panel on Climate Change
A scientific body established by the UN to assess the scientific basis of climate change, its impacts, and adaptation and mitigation options. It provides policymakers with comprehensive assessments of climate science to inform climate policies and actions globally.
ITMO – Internationally Transferred Mitigation Outcomes
Units representing emission reductions or removals generated by projects or activities in one country and transferred to another to fulfil mitigation commitments or trading agreements. They facilitate international cooperation on climate action by enabling the transfer of emission reductions between parties under the Paris Agreement
Jurisdictional REDD+
REDD+ initiatives whereby the scale of the measurement of the project, its baselines and emissions reductions are measured at the national or sub-national level.
Leakage
A measurement of the displacement of an avoided activity to an adjoining land area over time, thus undermining the value of the initial mitigation activity
Measurement
The process of accurately quantifying greenhouse gas emissions or removals from carbon offset projects. It involves collecting and analysing data to assess the environmental impact and effectiveness of carbon mitigation efforts.
Monitoring
The ongoing process of collecting and analysing data related to carbon offset projects. It involves tracking project activities, emissions, and carbon removals over time to ensure compliance with established standards and methodologies.
Nature-Based Solutions
Actions that harness ecosystems to address climate change impacts. This includes protecting or restoring forests, wetlands, and mangroves, as well as implementing sustainable land management practices. Commonly known as NbS they sequester carbon, enhance resilience to climate impacts, and provide co-benefits for biodiversity and communities
NDC – Nationally Determined Contributions
Climate action plans submitted by countries to the UNFCCC, outlining their commitments and targets for reducing greenhouse gas emissions and adapting to climate change. They form the basis of international climate agreements, including the Paris Agreement.
Nested REDD+
Exists as an intermediate step that seeks to allow countries to manage REDD+ initiatives through a combined Jurisdictional and Project level approach
Net Zero
The act of reaching net-zero emissions for an organisation, product, country or event as a result of reducing emissions where feasibly possible, and removing unabated emissions through carbon removal
Paris Agreement
A global legally binding treaty reached by world leaders at COP21 in 2015 setting goals to limit global warming to well below 2, or ideally 1.5 degrees above pre-industrial levels.
Permanence
The degree to which avoided, reduced or removed emissions will remain mitigated over time
Project REDD+
An individual and private REDD+ project controlled and measured at a specific location with a localised baseline
REDD+
A global framework to facilitate the financing of nature-based solutions that Reduce Emissions from Deforestation and forest Degradation and contribute to conservation, sustainable management and enhancement of forest carbon stocks. Moderated by the UNFCCC, and focused toward projects in developing and least developed countries, it involves the setting of a baseline of expected deforestation of an area based on historic trends or mandates, allowing the calculation of emissions avoided through the project activity.
Reduction
A carbon project that reduces, but may not eliminate, greenhouse gas emissions through efficiency improvements
Reforestation
The replanting of trees on lands that were previously forested but have been cleared or degraded.
Reporting
The systematic documenting of emission reduction activities, verifying their accuracy, and disclosing this information transparently to stakeholders, ensuring accountability and integrity in carbon offsetting initiatives.
Retirement
The permanent removal or cancellation of carbon credits from circulation, typically after they have been used to offset emissions or meet compliance obligations to ensure they are not double-counted or reused. Corporate claims that involve carbon offsets can only be made after retirement is finalised.
SBTi – Science Based Targets Initiative
A voluntary initiative providing corporations with a framework to set and achieve short and long term greenhouse gas emission reductions targets aligned with science that facilitates global emissions that avoid warming events in excess of 1.5 or 2 degrees. Administrator of the SBTi Corporate Net-Zero Standard
Scope I
Direct greenhouse gas emissions from sources that are owned or controlled by an organisation, including emissions from combustion of fossil fuels, operation of facilities, and transportation activities within company-owned vehicles
Scope II
Indirect greenhouse gas emissions associated with the generation of purchased electricity, heat, or steam consumed by an organisation. These emissions occur from sources that are not owned or directly controlled by the organisation but are necessary for its operations.
Scope III
Indirect greenhouse gas emissions that occur as a result of an organisation’s activities but are not included in Scope I or Scope II. These emissions can include upstream and downstream emissions from sources such as purchased goods and services, employee commuting, business travel, and waste disposal
SDGs – Sustainable Development Goals
A set of 17 interconnected global goals adopted by the UN to address social, economic, and environmental challenges and promote sustainable development. They encompass diverse issues such as poverty, health, education, gender equality, clean energy, climate action, and biodiversity conservation.
SEC Climate Related Disclosure US
The Securities and Exchange Commission’s regulatory requirements or guidelines for public companies in the US to disclose climate-related risks, impacts, and strategies in their financial filings and reporting
SECR Streamlined Energy and Carbon Reporting UK
A regulatory framework in the UK that requires large organisations to disclose their energy consumption, emissions, and related information in their annual reports. It aims to encourage energy efficiency, carbon reduction, and corporate accountability
Standard
A set of criteria established to verify the credibility and integrity of a project generating carbon credits, including additionality, permanence, measurement, reporting, verification to ensure claimed emission mitigations are real and verifiable.
The Oxford Principles for Net Zero Aligned Carbon Offsetting
Guidelines and criteria for ensuring the integrity, additionality, and effectiveness of carbon offset projects. Developed by the Oxford University Net Zero Initiative, these principles aim to enhance transparency, credibility, and accountability in carbon markets
UNFCCC – United Nations Framework Convention on Climate Change
An international treaty adopted in 1992 to address climate change by stabilising greenhouse gas concentrations in the atmosphere. It serves as the foundation for global climate cooperation, facilitating negotiations, and the development of climate agreements such as the Kyoto Protocol and the Paris Agreement.
Validation
The independent assessment and audit process conducted to validate the eligibility and compliance of a project and its design against a carbon standard. Once validation has been concluded, the project may submit the project for registration with the respective program within the standard.
VCMI – Voluntary Carbon Market Integrity
A collaborative initiative by public and private stakeholders to enhance transparency, integrity, and credibility of its participants. It seeks to develop standards, principles, and best practices for the use of carbon offsets to support climate action and sustainable development goals
VCS – Verified Carbon Standard
A leading standard for carbon offset projects, administered by Verra, providing guidelines and requirements for the validation, verification, and registration of emission reduction activities in the voluntary carbon market.
VCU – Verified Carbon Unit
A carbon credit issued by Verra to projects under the Verified Carbon Standard to recognise 1 tonne carbon dioxide equivalent (CO2e) reduced, avoided or removed
VER – Voluntary Emission Reduction
A carbon credit issued by Gold Standard to projects under the Gold Standard to recognise 1 tonne of carbon dioxide equivalent (CO2e) reduced, avoided or removed
Verification
The independent assessment and audit where a VVB confirms that the outcomes set out in the project documentation have been achieved and quantified according to the requirements of the respective standard.
Verra
A non-profit registry body that manages the VCS, and provides guidelines and requirements for the validation, verification and registration of emission reduction activities in the voluntary carbon market. Verra is also responsible for the issuance, transfer and retirement of VCUs.
Vintages
The vintage year or period associated with carbon offsets. It indicates the specific year or time period in which emission reductions or removals occurred, influencing their eligibility, credibility, and market value.
VVB – Validation and Verification Body
An independent organisation responsible for assessing and confirming the accuracy, credibility, and compliance of carbon offset projects. Through site visits and review of project monitoring data, it conducts validation to ensure project eligibility and additionality, and verification to verify emissions reductions or removals.
We hope you found his summary helpful and if you have any more questions about REDD+ or would like to open a conversation about the role nature-based solutions could play in your corporate strategy, please reach out at info@quadriz.com.
