Carbon credit

carbon creditstradable credit systemcarbon offset creditscreditsoffset credits creditsadditionalitycarbon certificatesCarbon Credit tradingClimate credits
A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the equivalent amount of a different greenhouse gas (tCO 2 e).wikipedia
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Carbon offset

carbon offsetsoffsetcarbon offsetting
These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects.
The Kyoto Protocol has sanctioned offsets as a way for governments and private companies to earn carbon credits that can be traded on a marketplace.

Carbon footprint

carbon impactcarbon footprintsCarbon thumbprint
There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis.
Carbon offsetting can reduce a companies overall carbon footprint by offering a carbon credit.

Clean Development Mechanism

CDMCDM-projectsClean Development Mechanism (CDM)
This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Mechanism.
If a project is registered and implemented, the EB issues credits, called Certified Emission Reductions (CERs, commonly known as carbon credits, where each unit is equivalent to the reduction of one metric tonne of CO 2 e, e.g. CO 2 or its equivalent), to project participants based on the monitored difference between the baseline and the actual emissions, verified by the DOE.

Assigned amount unit

Assigned amount unitscarbon dioxide creditsAAU
Under the Kyoto Protocol, the 'caps' or quotas for Greenhouse gases for the developed Annex 1 countries are known as Assigned Amounts and are listed in Annex B. The quantity of the initial assigned amount is denominated in individual units, called Assigned amount units (AAUs), each of which represents an allowance to emit one metric tonne of carbon dioxide equivalent, and these are entered into the country's national registry.
An Assigned Amount Unit (AAU) is a tradable 'Kyoto unit' or 'carbon credit' representing an allowance to emit greenhouse gases comprising one metric tonne of carbon dioxide equivalents calculated using their Global Warming Potential.

Kyoto Protocol

Climate Change-Kyoto ProtocolKyoto AccordKyoto
Under the Kyoto Protocol, the 'caps' or quotas for Greenhouse gases for the developed Annex 1 countries are known as Assigned Amounts and are listed in Annex B. The quantity of the initial assigned amount is denominated in individual units, called Assigned amount units (AAUs), each of which represents an allowance to emit one metric tonne of carbon dioxide equivalent, and these are entered into the country's national registry. The mechanism was formalized in the Kyoto Protocol, an international agreement between more than 170 countries, and the market mechanisms were agreed through the subsequent [[United Nations Framework Convention on Climate Change#2001 – COP 7, Marrakech, Morocco|Marrakesh Accords]].
The reductions are called "credits" because they are emission reductions credited against a hypothetical baseline of emissions.

Carbon project

carbon reduction schemes
Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world.
The second option is to purchase carbon credits within an emissions trading scheme.

Certified Emission Reduction

CERCertified Emissions ReductionCERs
Once approved, these units are termed Certified Emission Reductions, or CERs.
Certified Emission Reductions (CERs) are a type of emissions unit (or carbon credits) issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified by a DOE (Designated Operational Entity) under the rules of the Kyoto Protocol.

Clean technology

clean technologiescleantechclean-tech
Environmental finance is a method by which new clean technology projects that have proven that they are "additional" or "beyond business as usual" can obtain financing through the generation of carbon credits.

Emissions trading

cap and tradecap-and-tradeemissions trading scheme
Carbon trading is an application of an emissions trading approach.
For greenhouse gases, which cause climate change, permit units are often called carbon credits.

European Union Emission Trading Scheme

European Union Emissions Trading SchemeEU ETSEU Emissions Trading Scheme
The European Union's carbon credits traded from $7.78 to $25.19 averaging $16.21 per tonne in 2018.
Like the Kyoto trading scheme, EU ETS allows a regulated operator to use carbon credits in the form of Emission Reduction Units (ERU) to comply with its obligations.

Removal Units

removal unit
A Removal Unit (RMU) is a tradable carbon credit or 'Kyoto unit' representing an allowance to emit one metric tonne of greenhouse gases absorbed by a removal or Carbon sink activity in an Annex I country.

European Climate Exchange

Currently there are five exchanges trading in carbon allowances: the European Climate Exchange, NASDAQ OMX Commodities Europe, PowerNext, Commodity Exchange Bratislava and the European Energy Exchange.

Gold Standard (carbon offset standard)

CDM Gold StandardGold StandardThe Gold Standard
Its objective is to add branding, with a quality label, to Carbon Credits generated by projects which can then be bought and traded by countries that have a binding legal commitment according to the Kyoto Protocol, businesses or other organizations for carbon offsetting purposes.

Flexible Mechanisms

flexibility mechanismsCDM & JI A/R projectsFlexibility mechanism
The Protocol defines two project-based mechanisms that allow Annex I countries to meet their GHG emission reduction commitments by acquiring GHG emission reductions "credits."

Supplementarity

This is due to the lack of a developed secondary market for CERs, a lack of homogeneity between projects which causes difficulty in pricing, as well as questions due to the principle of supplementarity and its lifetime.
Emissions trading basically refers to the trading of emissions allowances (carbon credits) between one regulated entity and a less pollutive entity.

Tree credits

The system has been developed in response to the need for a simple way to get carbon credits to the individual planter with a minimum of overheads, and to simplify implementation and monitoring of such projects by using for-profit methods, much like microfinance.

Carbon tax

carbon taxestaxcarbon levy
Credits were chosen by the signatories to the Kyoto Protocol as an alternative to Carbon taxes.

Biochar

bio-charBiochar processing in thermal power stationsBiochar production
Carbon credits could help to make implementation easier as most large biomass power producers are neither equipped to create biochar nor are financially motivated for making it (because implementing biochar production would leave less energy for power production).

Priority Sector Lending Certificates

Priority Sector Lending certificates have similarities with a cap and trade systems like Carbon Credits.

Carbon dioxide equivalent

CO 2 e equivalentCO 2eq
A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the equivalent amount of a different greenhouse gas (tCO 2 e).

Market (economics)

marketmarketsmarket forces
Greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources.

Carbon dioxide

CO 2 CO2carbon dioxide (CO 2 )
The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere.

Investopedia

Investopedia.com
The Investopedia Inc investment dictionary defines a carbon credit as a “permit that allows the holder to emit one ton of carbon dioxide”..which “can be traded in the international market at their current market price”.