The terms listed below have been adapted from the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles Assessment Framework and Procedure – Part 5 – Definitions (available here).
| Term | Definition |
|---|---|
| Additionality | “Additionality” is the property of a project being “additional.” An additional project is one that would not have occurred without the incentive provided by carbon credit revenues. |
| Auditor | An independent third-party entity that is accredited to perform validation and/or verification audits of crediting projects. Synonyms include verification and validation bodies (VVB), validators, and verifiers. |
| Avoided emissions | The negative change in greenhouse gas emissions caused by an intervention relative to the intervention’s baseline scenario. |
| Baseline scenario | A scenario describing the activities, practices, and/or technologies that would have been adopted – and the associated emissions or removals that would have occurred – in the absence of an intervention (e.g., the incentive provided by carbon credits). If a project is not additional (i.e., it would have been undertaken regardless of carbon credit revenues), then the baseline scenario and project are (in principle) the same. |
| Cancellation | The permanent removal of a carbon credit in an electronic registry. Typically, cancellation “nullifies” the credit, such that no party can claim its associated avoided emissions or enhanced removals. This may be done, for example, to compensate for reversals or excess credit issuances, or for the purpose of re-issuing carbon credits for the same avoided emissions or enhanced removals under a different carbon crediting program. In some cases, however, “cancellation” is use synonymously with credit “retirement.” |
| Carbon credit | A tradable financial instrument that is issued by a carbon crediting program, representing avoided GHG emissions or enhanced removals, equivalent to one metric tonne of carbon dioxide equivalent. Carbon credits are typically serialised, issued, tracked, and retired or administratively cancelled by means of an electronic registry operated by an administrative body, such as a carbon crediting program. |
| Carbon crediting program | A standard-setting organization that registers crediting projects and issues carbon credits. |
| Carbon dioxide equivalent | The basic unit of carbon accounting. A metric used to compare the emissions from various greenhouse gases on the basis of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same GWP. Abbreviated to tCO2e for metric tonne carbon dioxide equivalent. |
| Corresponding adjustment | An accounting entry applied in the context of Article 6 of the Paris Agreement to account for the international transfer of mitigation outcomes and prevent double counting of avoided emissions or enhanced removals. |
| Crediting period | The period in which a crediting project can be issued carbon credits for the emissions it avoids or the removals it causes. Crediting periods are often shorter than the lifetime of a project, meaning some avoided emissions or enhanced removals may not be credited. |
| Crediting project | An activity that avoids emissions or enhances removals, relative to the activity’s baseline scenario, and seeks registration and issuance of carbon credits under a carbon crediting program. Although most such activities take the form of discrete “projects,” they can also include large-scale programs or even policy interventions implemented across jurisdictions (as in the case of jurisdiction-level crediting of avoided deforestation measures). Synonyms include mitigation activity and offset project. This guide uses “crediting project” as a shorthand for all such activities and interventions. |
| Double counting | A situation in which a tCO2e of avoided emission or enhanced removal is counted more than once toward achieving mitigation targets or goals. Double counting can occur through double issuance, double use, and double claiming. |
| Double issuance | A type of double counting in which more than one carbon credit is issued for the same avoided emissions or enhanced removals (and credits are not cancelled accordingly, e.g., to effect a transfer of a credit from one registry to another). |
| Double use | A situation in which a single carbon credit is claimed more than once toward achieving mitigation targets or goals. This can happen, for example, if an unscrupulous seller retires a carbon credit on behalf of more than one buyer. |
| Enhanced removals | The positive change in greenhouse gas removals caused by an intervention relative to the intervention’s baseline scenario. |
| Ex ante carbon credits | Carbon credits that are issued for projected avoided emissions or enhanced removals, before they occur and are verified. Some crediting programs issue ex ante credits as a distinct type of credit, which may then be converted to ex post credits after avoided emissions or enhanced removals have been monitored and verified. |
| Ex post carbon credits | Carbon credits that are issued after avoided emissions or enhanced removals achieved by a crediting project occur and have been monitored and verified. |
| Greenhouse Gas (GHG) | Gases, both naturally occurring and anthropogenic, that trap heat in the atmosphere. The primary anthropogenic GHGs tracked in national inventories include carbon dioxide, methane, and nitrous oxide. |
| Issuance | The instruction by the relevant authority in a carbon crediting program to create and serialize a specified quantity of carbon credits in a registry account. |
| Leakage | An unintentional increase in emissions or decrease in removals caused by an intervention, relative to the intervention’s baseline scenario, which typically occurs at sources or sinks physically separate from the location where the intervention is implemented. For example, leakage can occur due to a shift in where emissions occur due to market responses, changes in human activity near a project, or changes in physical processes. |
| Materiality | An auditing concept applied by auditors in validation and verification engagements to label the significance of identified errors, omissions, misstatements, or the aggregation of these, in the quantification of avoided emissions or enhanced removals from a crediting project. “Immaterial” findings by auditors are deemed insufficiently significant to affect their verification decisions. |
| Methodology | A methodology defines the GHG accounting rules and requirements for implementing, monitoring, reporting, and verifying crediting projects. Methodologies are approved by crediting programs for specific project types and define project eligibility conditions along with methods for determining additionality, setting the baseline, and quantifying baseline and project emissions. The term “protocol” is used interchangeably with methodology. |
| Mitigation contribution | The act of retiring carbon credits for the purpose of claiming to have enabled avoided emissions or enhanced removals, without making any compensation claims. This contrasts with “offsetting,” where the express purpose of retirement is to compensate for an entity’s emissions. |
| Offsetting | The compensation of an entity’s greenhouse gas emissions (within its allocational GHG (i.e., inventory) accounting boundaries) by retiring an equivalent amount of carbon credits. |
| Permanence | A criterion for the environmental integrity of carbon credits, stipulating that the avoided emissions or enhanced removals associated with a carbon credit must endure for at least long as an emission of CO2 will elevate atmospheric CO2 levels (i.e., for thousands of years, or in effect, “permanently”). For some types of mitigation projects – e.g., those that store carbon in forests – this is not practically achievable, since for these activities there is significant risk of reversal (see separate definition). Most carbon crediting programs therefore require that carbon is stored for a minimum duration (e.g., several decades) and – in some cases – refer to “durability” rather than “permanence.” |
| Project developer | In this guide, the project developer refers to the legal entity requesting the registration of a crediting project and issuance of carbon credits. The crediting project developer may be a public or private entity. Synonyms include project proponent and mitigation activity proponent. Note that sometimes the project developer may be distinct from the entity submitting a project for registration. If this occurs, the registering entity is referred to as the project proponent and is distinct from the project developer. |
| Registry | An information technology system used by carbon crediting programs to: (1) register, track, and make publicly available information on carbon crediting projects; and (2) issue carbon credits, enable the transfer of carbon credits between different accounts, and cancel or retire them. |
| Retirement | The permanent removal of a carbon credit in a registry for the purpose of claiming the associated avoided emissions or enhanced removals toward compliance requirements or voluntary goals. |
| Reversal | For a crediting project that enhances or preserves carbon stocks in reservoirs (see enhanced removals), the occurrence of an event in which some or all of the additional increment in stocks resulting from the crediting project are subsequently released to the atmosphere. Reversals can, for example, occur due to natural processes, such as wildfires, or anthropogenic drivers, such as timber harvest or land conversion. |
| Social and environmental safeguards | Policies, standards, and operational procedures designed to identify, prevent, and mitigate adverse social and environmental impacts that may arise from the implementation of mitigation activities. |
| Validation | The process by which auditors confirm that a crediting project meets all eligibility criteria for registering with a crediting program. |
| Verification | The process by which auditors confirm that a crediting project has been properly monitored, and that avoided emissions or enhanced removals achieved by the crediting project have been properly quantified in accordance with crediting program rules and standards. |
| Vintage | The “vintage” of an offset credit can refer either to the year in which it was issued, or the year in which associated avoided emissions of enhanced removals occurred (for some kinds of crediting projects, there can be a significant lag between the latter and the former, because of longer verification cycles, e.g., with forestry projects). |