Rules permitting to quantify GHG reductions associated with a carbon project, as being eligible for conversion to carbon title. To avoid giving credits to projects that would have happened anyway (i.e. freeriders), rules have been specified to ensure additionality of the project, that is, to ensure the project reduces emissions more than would have occurred in the absence of the project.
There are types of aggregation: The first type consists in grouping together GHG reduction’s efforts from several small final emitters into a unique carbon project. Once converted into VCU, these reductions will be marketed around a same unit value. The second type includes the aggregation of several types of carbon credits (GHG reductions from different carbon projects) that can be grouped in a trader portfolio. The titles are not necessary of the same unit value that varies according to the standard used as well as the nature and the origin of the carbon project.
A carbon crédit (offset under the regulated market, or voluntary for the voluntary market) is a GHG emission quantity in ton of CO2 equivalent (t CO2eq), which is not release in the atmosphere. Is it a GHG emission quantity that has been permanently and irreversibly reduced by a person, organism or company throughout a project that goes beyond business as usual. A carbon credit can be bought or used to compensate GHG emitted by another person, organism or company.
Organized market that is defined and supported by regulation for the negociation and the exchance of GHG emission trading.
Compensation of carbon emissions through the financing of sustainable actions, such as the purchase of carbon credits or VCU on the voluntary market.
GHG project reductions transmitted to standard and methodological organization and validated by a third part. In December 2012, there were about 7,000 validated carbon projects since 2004, as per international standard such as CDM (5000), VCS (950), CAR, Gold Standard and others.
Carbon Voluntary Market
GHG reduction trading mechanisms converted into carbon credits and not linked to regional, national or international regulations.
Community made of a mosaic of stakeholders sharing the same objective to act on climate change using market mechanisms.
When two different entities produce the same quantity of emissions in the respective inventory, it can create double accounting. However, double accounting depends on the precision of the direct or indirect emissions’ declaration. The importance of double accounting depends on the information obtained.
Emission Trading (emission allowance)
An emission trading is a generic term representing a free emission unit or offset credit for a cap and trade system for greenhouse gas emission allowances defined by regulation in a regulated market. In Quebec, it is the cap-and-trade system for greenhouse gas emission allowances. The emission unit represent the authorization to produce one ton of GHG. The number of GHG emissions is limited. The total emission for all emitters targeted by the regulation equal the maximum annual limit of GHG emission published by the Government.
One GHG reduction corresponds to one ton of CO2 equivalent (carbon dioxide).
Large Final Emitters (LFE)
Sites/installations that produced annually 25,000 tons of GHG or more. In Quebec, as per the December 2011 regulation, there are about 75 sites/installations of this type. In Canada, large final emitters include energy-intensive mining and manufacturing, oil and gas and thermal electricity sectors.
Expertise and knowledge on the methodological, economical and financial mechanisms implemented in several carbon markets – offset or regulated – responding to manager needs and emphasizing the market dynamic.
Project Description (PD)
Document describing the required parameters for the validation of a carbon project. That is to say, a GHG reduction project to be validated and quantified from a standard such as VCS
English name to designate a carbon project promoter. Also called « Project Proponent ».
Referencing audit (Audit Ex Ante)
Operation that identifies and confirms the basis scenario (referencing) of the GHG emissions associated to an installation and that are eligible in a carbon project. The basis scenario’s identification of the GHG emissions that are eligible will permit to measure GHG reduction emissions annually.
Site or installation that produced annually a GHG quantity superior to the one defined in the regulation, usually 25 000 MT Co2e are under the regulated market. As it is the case in Quebec, where site/installation must respect precise reporting and regulatory compliance. All this is precise in the Quebec Cap and Trade system for greenhouse gas Emission Allowances.
Establishment producing goods and services that can be included in the industrial, commercial and institutional categories (ICI).
Small Final Emitters (SFM)
Sites/installations that produce less than 25,000 tons of GHG annually.
Stimulation of efforts
Information permitting to identify GHG reductions’ opportunities eligible in a carbon project. This information might include either a behavioural change and/or the introduction of clean technology. These activities can be realized inside a site/building/installation or several sites/buildings/installations of a same Community.
Sustainable Community Solution
Solution based on VCS VM0018 methodology that targets small final emitters (businesses, local governments and organizations) sharing a common territory and are clusters into a regional Carbon Group. Sustainable Community Solution targets activities such as improved energy efficiency for buildings, redirection of waste away from landfills and optimal usage of transportation for businesses.
Actions that permit to track a waste or material from its origination to its final destination or consumption point.
Validator Verificator Body (VVB)
Validation entity for carbon projects and/or GHG reductions validation arising from a carbon project
Verified Carbon Standard (VCS)
VCS was founded to provide a robust quality assurance standard that projects could use to quantify greenhouse gas emissions and issue credits in voluntary markets. VCS was nominated, by its peers, in April 2012 as the best voluntary standard on the market.
Verified Carbon Unit (VCU)
Financial title associated to a GHG reduction and eligible in accordance to a carbon project, that has been validated by a third part and that become a VCU title corresponding to one ton CO2 equivalent (carbon dioxide) on the carbon markets.