The meaning and system of carbon market

1. CARBON
MARKET

2. GHG TERMINOLOGIES

3.  Carbon Footprint: The total amount of greenhouse gases,
specifically carbon dioxide, produced directly or indirectly
by an individual, organization, event, or product
 Carbon Offsetting: The process of compensating for
carbon dioxide emissions by investing in projects that
reduce or capture an equivalent amount of greenhouse
gases elsewhere
TERMINOLOGIES

4.  Carbon Credits: Tradable certificates representing a
reduction or removal of greenhouse gas emissions, typically
earned through emission reduction projects.
 Climate Neutral: A state in which an entity has balanced
its greenhouse gas emissions by reducing or offsetting them,
resulting in a net-zero carbon footprint.
TERMINOLOGIES

5.  Carbon Intensity: The amount of carbon dioxide
emissions produced per unit of economic output, energy
consumed, or another relevant metric.
 Life Cycle Assessment (LCA): A comprehensive analysis
of the environmental impacts of a product, process, or
service throughout its entire life cycle, including raw
material extraction, production, use, and disposal.
TERMINOLOGIES

6.  Carbon sequestration: The process of capturing and storing
carbon dioxide to prevent its release into the atmosphere, often
through activities like afforestation or the use of carbon capture
and storage technologies.
 Carbon trading: The buying and selling of permits or
credits that allow organizations to emit a certain amount
of greenhouse gases, promoting emission reductions
where they are most cost-effective.
TERMINOLOGIES

7.  Carbon credits: Units representing a reduction or removal
of greenhouse gas emissions, typically traded in carbon
markets.
 Carbon sink: Natural or artificial reservoirs that absorb
more carbon than they release, helping to mitigate the
effects of greenhouse gas emissions.
TERMINOLOGIES

8.  Cap-and-trade: A market-based approach to controlling
emissions, where a cap is set on the total allowable
emissions, and companies can buy and sell emissions
allowances.
 Climate finance: Financial resources provided to
support projects and initiatives aimed at mitigating and
adapting to climate change.
TERMINOLOGIES

9.  Carbon tax: A form of carbon pricing where a tax is
levied on the carbon content of fossil fuels or other
greenhouse gas-emitting activities.
 Carbon capture and storage (CCS): Technologies that
capture carbon dioxide emissions from industrial
processes and power plants, preventing them from
entering the atmosphere.
TERMINOLOGIES

10.  Compliance market: A carbon market where
participants, usually companies, trade emissions
allowances to comply with regulatory requirements and
achieve emissions reduction targets.
 Voluntary carbon market: A market where individuals,
companies, or governments trade carbon credits on a
voluntary basis to reduce their carbon footprint beyond
regulatory obligations.
TERMINOLOGIES

11.  Carbon registry: A database that tracks and records
the issuance, transfer, and retirement of carbon credits,
ensuring transparency and integrity in carbon markets
 Carbon leakage: The situation where industries move
production to regions with laxer carbon regulations,
potentially leading to an overall increase in global
emissions.
TERMINOLOGIES

12.  Carbon market liquidity: The ease with which carbon
credits can be bought or sold in a market, influenced by
the number of participants and the volume of trading.
 Carbon market price: The cost of one ton of carbon
dioxide equivalent (CO2e) in a carbon market,
determined by supply and demand dynamics.
TERMINOLOGIES

13.  Carbon market volatility: The degree of fluctuation in
carbon market prices, influenced by factors such as
policy changes, economic conditions, and technological
advancements.
 Carbon auction: A method of allocating emissions
allowances by selling them to the highest bidders,
typically used in cap-and-trade systems.
TERMINOLOGIES

14.  Carbon credit buyer: An entity that purchases carbon
credits to offset its own emissions or meet regulatory
compliance requirements.
 Carbon credit seller: An entity that generates carbon
credits through emission reduction projects and sells
them to other parties in the carbon market.
ERMINOLOGIES

15.  Carbon pricing: Policies that assign a monetary value to
carbon emissions, encouraging businesses and
individuals to reduce their carbon footprint.
ERMINOLOGIES