Cap and Trade: A system involving trading of emission allowances, where the total allowance is strictly limited or 'capped'. A regulatory authority establishes the cap which is usually considerably lower (50% to 85%) than the historic level of emissions. Allowances are created to account for the total allowed emissions. Trading occurs when an entity has excess allowances, either through actions taken or improvements made, and sells them to an entity requiring allowances because of growth in emissions or an inability to make cost-effective reductions. Cap and Trade programmes are closed systems, but can be modified to allow the creations of new permits by non-capped sources in the manner of credit-based systems.
Carbon Dioxide Capture and Storage (CCS): Process consisting of the separation of CO2 from industrial and energy-related sources, transport to a storage location and long-term isolation from the atmosphere.
Carbon Dioxide Equivalent (CO2e): The universal unit of measurement used to indicate the global warming potential (GWP) of each of the 6 greenhouse gases. The concentration of CO2 that would have the same level of global warming impact as a given type and concentration of greenhouse gas.
Carbon Dioxide (CO2): A naturally occurring gas that is a by-product of burning fossil fuels and biomass, land use changes and other industrial processes. Carbon dioxide is the reference gas against which other greenhouse gases are measured.
Carbon Market: A popular but misleading term for a trading system through which countries can buy or sell units of greenhouse-gas emissions in order to meet their national limits on emissions, either under the Kyoto Protocol or under other agreements. The term comes from carbon dioxide being the predominant greenhouse gas and other gases being measured in units of "carbon-dioxide equivalents."
Carbon Neutral: Zero CO2 emissions from sources, which are currently not addressed, or only inadequately addressed, by climate policies (e.g. private households, public administrations, most small and medium sized businesses, air travel). Carbon neutrality is a voluntary market mechanism to encourage the reduction of emissions and can be achieved either by actual reductions or offsetting.
Carbon Sequestration: The process of removing carbon from the atmosphere and depositing it in a reservoir
Carbon Sink: A reservoir that can absorb or “sequester” carbon dioxide from the atmosphere. Forests are the most common form of sink, as well as soils, peat, permafrost, ocean water and carbonate deposits in the deep ocean.
Carbon Taxes: A surcharge or levy on the carbon content of oil, coal, and/or gas to discourage the use of fossil fuels, with the aim of reducing carbon dioxide emissions
Certification: Emission reductions need to be certified by independent third parties through a verification process. Certification endorses the existence, eligibility and title of the emission reduction (in relation to the underlying project). Once certification has occurred the emission reduction then becomes a separate tradable commodity.
Certified Emission Reductions (CERs): A Kyoto Protocol unit equal to 1 metric tonne of CO2 equivalent. CERs are issued for emission reductions from CDM project activities provided they meet certain eligibility criteria. For example, CERs generated under the CDM will only be recognised when:
• the reductions of greenhouse gas emissions are additional to any that would occur in the absence of the certified project (see Additionality)
• requirements of the Host Country are met and
• the CDM Adaptation charge is paid ie. the Levy to offset climate change adaptation costs in "vulnerable" developing countries. This levy is generally envisioned as an initial percentage of the total financing cost and is paid up front by the project sponsor, in the form of either currency or emission credits, which are then auctioned. Proceeds are held in an adaptation fund for later disbursement.
Two special types of CERs called temporary certified emission reduction (tCERs) and long-term certified emission reductions (lCERs) are issued for emission removals from afforestation and reforestation CDM projects.
Chlorofluorocarbons (CFCs): organic compounds containing carbon, chlorine, and fluorine atoms. They are widely used as coolants in refrigeration and air conditioners, as solvents in cleaners, and as propellants in aerosols. CFCs are the main cause of stratospheric ozone depletion. One kilogram of the most commonly used CFCs may have a direct effect on climate thousands of times greater than that of one kilogram of CO2. However, because CFCs also destroy ozone - itself a greenhouse gas - the actual effect on the climate is unclear.
Clean Development Mechanism (CDM): A mechanism under the Kyoto Protocol through which developed countries may finance greenhouse-gas emission reduction or removal projects in developing countries, and receive credits which they may apply towards meeting mandatory limits on their own emissions. The CDM is designed to meet two main objectives: to address the sustainable development needs of the host country, and to increase the opportunities available to Parties to meet their reduction commitments.
Clear Skies Act (Clear Skies Initiative): Establishes in the United States federally enforceable emissions limits (or "caps") for three pollutants - SO2, NOx, and mercury for a period of 2008-2018. Clear Skies' NOx and SO2 requirements affect all fossil fuel-fired electric generators greater than 25 megawatts that sell electricity.
Climate Change: 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 over comparable time periods (Source: UNFCCC)
Coal Mine Methane Recovery: capturing methane released from coal bed seams during the mining process for flaring or energy use.
GHG Reduction & Project Quantification:
Global Warming Potential (GWP) of methane (CH4) = 21, GWP of CO2 = 1. Combustion of 1 tonne of CH4 produces 2.75 tonnes of CO2; therefore the capture and combustion 1 tonne of fugitive CH4 emissions yields a GWP benefit of at least 18.25 tonnes CO2e. If the captured CH4 is used as an energy source (on-site or delivered into a pipeline) the full 21 tonnes of GHG reductions can be claimed.
Additionality: Regulations require active mines to liberate coal bed CH4 to reduce the threat of ignition in the mine, however capturing coal bed CH4 and converting it to an energy source is voluntary. Most mines vent coal bed CH4, some mines capture the CH4 and sell it into a pipeline, but no active mines flare.
Verification: Meter records, pipeline records, electricity production records, and/or gas sales receipts can be used for verification and auditing purposes.
Ancillary Benefits: a) Promotion of coal mine CH4 as a sustainable/renewable energy source that is no longer wasted
b) Potential to enter into a gas purchase agreement with the Seller.
Cogeneration: the use of waste heat from electric generation, such as exhaust from gas turbines, for industrial purposes or district heating.
Commercial / Industrial Efficiency: reduction of fuel consumption and emissions by applying innovative technologies in energy- and waste-intensive industries. Practices include advanced manufacturing and refining processes; cogeneration; efficient steam systems; waste-to-energy; and electric motors and drives.
GHG Reduction & Project Quantification: Projects offset power from fossil fuel sources through reduced consumption. Energy is reduced by the installation of efficient technologies, changes in operational procedures, and changes in management practices. Energy consumption is based on historical measurement and projections of business as usual future use and measurement of project-based improvements. Emissions factors are used to calculate the corresponding emission reductions.
Additionality: Energy efficiency improvements are generally considered to be above what is required by codes and efficiency standards.
Verification: Electricity production and consumption is metered and verified by independent third parties utilising electricity bills and meter readings.
Commitment Period: The five year Kyoto Protocol Commitment Period is scheduled to run from calendar year 2008 to calendar year 2012 inclusive.
Commitment Period Reserve (CPR): The minimum number of Kyoto Units as calculated and required to be held in a Registry pursuant to the Kyoto Protocol
Community Independent Transaction Log: The transaction log which will be established under the EU Emissions Trading Scheme, through which all Transactions will be communicated and recorded, checked, and completed or rejected as appropriate.
Competent Authority: The authority designated by a MemberState or the Commission to preside over the running of the EU ETS Registry.
Compliance Committee: A committee that helps facilitate, promote and enforce on compliance with the provisions of the Kyoto Protocol. It has 20 members with representation spread among various regions, small-island developing states, Annex I and non-Annex I parties, and functions through a plenary, a bureau, a facilitative branch and an enforcement branch.
Common Reporting Format (CRF): Standardized format for reporting estimates of greenhouse-gas emissions and removals and other relevant information by Annex I Parties.
Compliance: Fulfilment by countries/businesses/individuals of emission and reporting commitments under the UNFCCC and the Kyoto Protocol.
Compliance Period or Year: In states with RPS requirements, facilities subject to the requirement have to ensure that they have sufficient certificates in their account for each compliance period. For example, in Texas by March 31, each competitive retailer must submit credits to the program administrator from its account equivalent to its REC requirement for the previous compliance period (calendar year).
Conference of Parties: The COP is the supreme body of the United Nations Framework Convention on Climate Change (UNFCCC). The role of the COP, which consists of more than 170 nations that ratified or acceded to the Framework Convention on Climate Change, is to promote and review the implementation of the convention.
Countries with Economies in Transition (EIT): The Central and East European countries, Russia, and the former republics of the Soviet Union that are in transition from centrally-planned economies to market-based economies.
Credit: term commonly used in relation to emission reductions that have been achieved in excess of the required amount for:
• Joint Implementation, also known as Emission Reduction Units (ERUs) or
• Clean Development Mechanism projects, specifically known as Certified Emission Reductions (CERs)