CARBON OFFSET GLOSSARY

Actions Implemented Jointly (AIJ):The term assigned to joint implementation projects undertaken during the pre-year 2000 pilot phase, created at the United Nations Framework Convention on Climate Change's first Conference of the Parties in April 1995. There will be no official inter-country crediting of carbon credits during this pilot phase. It is not yet clear how AIJ projects will differ from JI projects with respect to long-term crediting. See Joint Implementation.

Afforestation: Generally refers to the planting of trees on ground where trees have never existed or were last present hundreds of years ago. Afforestation carbon offset projects bear an additional burden of showing ecological compatibility.

Anaerobic Decomposition: The breakdown of a molecule into simpler molecules or atoms by microorganisms in the absence of oxygen. Includes anaerobic digestion and anaerobic fermentation. The primary product of anaerobic decomposition is methane (CH4), a powerful greenhouse gas.

Anthropogenic: Anything caused or created by human activity.

Biofuels: Biofuels include wood, wood waste, agricultural crop residues, dedicated energy crops, and food waste, as well as gaseous and liquid fuels produced from these feedstocks. Most biofuel technologies are considered capable of producing carbon offsets, although lifecycle CO2 emissions can become important.

Biogas: The gas produced from the anaerobic decomposition of organic material in a landfill, wastewater treatment facility, or animal waste treatment facility. Biogas utilization in cases where it otherwise escapes to the atmosphere or is flared is a potential source of carbon offsets.

Biomass: See Dry Biomass.

Carbon: In the context of carbon offsets, the mass of elemental carbon emitted or sequestered. Used to provide consistency of measurements between different chemical configurations of carbon (e.g., between carbon in CO2 and carbon in biomass). Carbon's molecular weight is 12, while the molecular weight of CO2 is 44. Multiplying by 3.67 takes a figure expressed in carbon tons to tons of CO2.

Carbon Accounting: The issues associated with measuring, calculating, and valuing the relative benefits of greenhouse gas mitigation measures.

Carbon Cycle: All carbon reservoirs and exchanges of carbon from reservoir to reservoir by various chemical, physical, geological, and biological processes.

Carbon Discount Rate: Analogous to a financial discount rate, a carbon discount rate applied to future carbon flows is used to account for the fact that carbon benefits today may be valued more highly than carbon benefits in the future.

Carbon Offset: A mechanism by which the impact of emitting a ton of CO2 can be negated or diminished by avoiding the release of a ton elsewhere, or absorbing a ton of CO2 from the air that otherwise would have remained in the atmosphere. It can be helpful to differentiate between an emissions reduction and a carbon offset. Demand side management efforts pursued inside a utility's service territory, for example, would constitute an emission reduction; efforts pursued outside a utility's service territory, whether domestically or internationally, would be categorized as CO2 offsets since the impacts of the project would not show up in the utility's emissions statistics.

Carbon Sequestration: A flow of carbon by which it is absorbed or taken out of the atmosphere and stored in a terrestrial or oceanic reservoir. This differs from the preservation of existing carbon stocks in a reservoir.

Carbon Ton-Year: A ton-year of benefit refers to avoiding the presence of one ton of carbon in the atmosphere for one year. The ton-year unit is used to compare carbon benefits of offset projects whose effects may differ over time. It is analogous to "renting" the services of an offset ton for one year. For example, a forestry project may initially sequester only small amounts of carbon while storing large amounts in later years; a demand side management project may avoid a consistent amount of emissions throughout its shorter duration. Converting these amounts to ton-years can be viewed as allowing more consistent comparisons of project benefits.

Chlorofluorocarbons: A class of inert, non-toxic gases used in refrigeration, packaging, insulation, or as solvents and aerosol propellants, among other uses. Chlorofluorocarbons (CFCs) can break down in the stratosphere to release ozone-damaging chlorine ions; they are being phased out of production pursuant to the Montreal Protocol. In addition to threatening the ozone layer, they are potent greenhouse gases. Their greenhouse-forcing effect, however, may be negated by their cooling effect in the stratosphere. See Montreal Protocol.

Climate Challenge Program: A program initiated by the United States government in 1993 that calls on electric utilities to voluntarily reduce their CO2 emissions. The Climate Challenge Program is part of the Clinton Administration's Climate Change Action Plan. See Climate Change Action Plan.

Climate Change Action Plan (CCAP): A comprehensive set of programs proposed by the Clinton Administration to help meet U.S. commitments under the United Nations Framework Convention on Climate Change, i.e. to reduce CO2 emissions to 1990 levels by the year 2000. The CCAP includes actions to improve supply and demand side energy efficiency, reduce emissions from the transportation sector, reduce emissions of other greenhouse gases, promote forest management to sequester CO2, encourage pursuit of joint implementation, and challenge electric utilities to voluntarily reduce their CO2 emissions. See Climate Challenge Program.

Coalbed Methane: Methane released from coalbeds in the same way that natural gas is produced from other strata. Normally considered a safety hazard, the capture and utilization of otherwise vented methane can constitute an effective carbon offset.

Criteria Pollutant: Any air pollutant determined to be hazardous to human health and regulated under the Clean Air Act through national ambient air quality standards (carbon monoxide, nitrogen oxides, and non-methane volatile organic compounds).

Deforestation: The conversion of forested to non-forested land. Deforestation can involve the cutting and burning of trees to provide land for agricultural purposes or clearing for residential and industrial uses.

Demand Side Management (DSM): Actions undertaken to reduce the amount of energy required for end-use applications in residences, commercial buildings, or in industrial processes. Examples include installing high-efficiency light bulbs and appliances, improving insulation, and installing energy-efficient motors. Because reducing demand for energy can help avoid the need for new generating capacity, DSM activities are often cost-beneficial to electric utilities. To the extent that they reduce required generation, DSM activities also help to reduce emissions of CO2 and other pollutants.

Dry Biomass: The total oven-dry organic matter (as opposed to green or wet biomass). Dry biomass is approximately 50 percent carbon by weight. Dry biomass may typically be half the weight of wet biomass.

Emission Coefficient: A unique value for determining the amount of an emission that results from combustion of a unit of fuel; also called emission factor. For example, the average CO2 emissions factor for U.S. grid power is 0.586 metric tons/MWh.

Energy Policy Act Section 1605(b): A section of the Energy Policy Act of 1992 that calls for utilities to voluntarily report measures undertaken to reduce, sequester, or avoid greenhouse gas emissions. Reported measures are entered into a nationwide database of carbon offset projects, which could, in principle, be used for crediting purposes under a future carbon regulatory regime.

Enteric Fermentation: A digestive process by which carbohydrates are broken down by microorganisms into simple molecules for absorption into the bloodstream of an animal. Enteric fermentation is a source of methane emissions.

Forest Degradation: The ecologically deleterious depletion by human activity of standing woody biomass and organic matter in forests, often associated with over-utilization of the forest for fuel or timber.

Forest Management: Usually used in the context of activities that promote the growth and yield of merchantable timber, including fertilization, pesticide and herbicide applications, thinning overstocked stands, and replanting understocked stands. These activities often increase the amount of carbon sequestered in the stands because of increased yield. Forest management can also refer to measures that increase total biomass loading without increasing merchantable timber.

Forest Protection: Preventing forest degradation or deforestation. Since carbon stored in forests is released when forests are degraded or destroyed, forest protection is in effect an emissions reduction measure. There may also be a carbon sequestration component associated with the forest's potential for ongoing carbon uptake.

Framework Convention on Climate Change (FCCC): An international agreement signed at the 1992 United Nations Conference on Environment and Development in Rio de Janeiro outlining policy measures for reduction of greenhouse gas emissions and calling on signatories from developed countries to reduce CO2 emissions to 1990 levels by the year 2000. The convention was signed by all U.N. members and has been ratified by 151 countries; it came into force in 1994. The first Conference of the Parties was held in Berlin in April 1995.

Fuel Cycle: The set of sequential processes or stages involved in the utilization of fuel, including extraction, transformation, transportation, and combustion. Greenhouse gas emissions generally occur at each stage of the fuel cycle. An offset project's boundaries can be drawn to reflect total fuel cycle emissions or not.

Fuel Switching: In the context of carbon offsets, the substitution of a "cleaner" or more energy efficient fuel (e.g., substituting natural gas for coal). Fuel switching is usually done to reduce the amount of pollutants (including CO2) produced per unit of generation.

Fugitive Emissions: Unintended leaks of gas from the processing, transmission, or transportation of fossil fuels.

Global Environmental Facility (GEF): A financial mechanism that provides grant and concessional funds to recipient countries for projects and activities that aim to protect the global environment. It is jointly implemented by the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), and the World Bank. The GEF was launched in 1991 as a pilot program and entered its operational phase in 1995.

Global Warming Potential (GWP): The instantaneous radiative forcing that results from the addition of 1 kilogram of a gas to the atmosphere, relative to that of 1 kilogram of carbon dioxide. Over a time horizon of 100 years, methane has a GWP of 24.5, nitrous oxide has a GWP of 320, and CFC-11 has a GWP of 4,000.

Greenhouse Effect: A popular term used to describe the roles of water vapor, carbon dioxide, and other greenhouse gases in keeping the Earth's surface some 59 Fahrenheit warmer than it would be in the absence of the gases. These gases allow shorter wavelengths of solar radiation to enter the atmosphere, but slow the escape of longer wavelength energy radiating from the Earth's surface.

Greenhouse Gases: Any gas that contributes to the greenhouse effect in the Earth's atmosphere.

Halocarbons: A family of inert, non-toxic chemicals that contain halogens, such as chlorine, fluorine, or bromine. Halocarbons include chlorofluorocarbons, perfluorocarbons, hydrochlorofluorocarbons, and bromofluorocarbons. Halocarbons are used in refrigeration, packaging, insulation, solvents, aerosol propellants, and other uses. They generally have a high global warming potential. The use of many halocarbons is scheduled to be phased out under the Montreal Protocol.

Intergovernmental Negotiating Committee (INC): The body established to consider organization, procedural, and technical matters relating to implementation of the United Nations Framework Convention on Climate Change.

Intergovernmental Panel on Climate Change (IPCC): A panel established jointly in 1988 by the World Meteorological Organization and UNEP to assess scientific information relating to climate change and formulate realistic response strategies. The IPCC is the Framework Convention's scientific advisory body.

Joint Implementation (JI): Refers to a provision of the Framework Convention that would allow countries to pursue climate change mitigation projects outside their borders to achieve their own CO2 emissions reduction commitments. JI activities have the potential to dramatically reduce the overall cost of curbing emissions, since countries with limited or expensive mitigation options would be able to pursue more cost-effective opportunities elsewhere. See Activities Implemented Jointly.

Merchantable vs. Total Biomass: Merchantable biomass refers to the amount of tree biomass that can be effectively converted into wood products. This is often the measure of wood volume that is most readily available for commercial species in different soil and climate regimes. Total biomass includes non-merchantable biomass, such as twigs, branches, roots, debris, and other associated organic matter.

Methane (CH4): A hydrocarbon gas that is the principal constituent of natural gas. It is generally considered to be 24.5 times as powerful a greenhouse gas as CO2 over a 100-year time frame.

Montreal Protocol on Substances that Deplete the Ozone Layer: An international agreement to substantially reduce the use of chlorofluorocarbons (CFCs), a class of halocarbons that have been implicated in depletion of the Earth's ozone layer. Signed in January 1989 by most industrialized nations, the original document called for a 50 percent reduction in CFC use by 1992, relative to 1986 levels. A subsequent agreement (called the London Agreement) called for a complete elimination of CFC use by 2000.

Nitrous Oxide (N2O): A potent greenhouse gas, the primary anthropogenic emissions of which are thought to come from agricultural fertilizers, and to a lesser degree, fossil fuel combustion and biomass burning. It is considered to be 320 times as powerful a greenhouse gas as CO2 over a 100-year time frame. Should be differentiated from oxides of nitrogen (NOx).

Non-Criteria Pollutants: Air pollutants that are not regulated under the Clean Air Act's national ambient air quality standards; see Criteria Pollutants. CO2 is a non-criteria pollutant.

Peri-Fluorocarbons (PFCs): A class of chemicals composed of one or two carbon atoms and four to six fluorine atoms. PFCs have no commercial uses and are emitted as a byproduct of aluminum smelting.

Project Additionality: Reflects the extent to which the project implementation case is truly the result of carbon offset or analogous considerations. A project's benefits are most obviously additional if it can be shown that carbon changes associated with the project would not have occurred "but for" this specific project and that the project would not have occurred "but for" the availability of carbon offset funding. Additionality involves complex issues of corporate intent, project timing, and project finances. Because of the difficulties associated with defining an additionality standard, it is unclear whether and how it will be incorporated into long-term carbon offset policy.

Project Ancillary Benefits: Non-CO2 benefits of a project, including environmental, economic, and societal benefits.

Project Baseline: The project baseline is the starting point for measuring changed emissions and sequestration associated with a climate change mitigation project. Section 1605 sets a baseline period of 1987 to 1990.

Project Boundary: A conceptual line drawn around a project to encompass the emissions sources and sinks that will be considered in a project's carbon benefit calculations. The boundary is not necessarily geographical. Project boundaries can be drawn narrowly (encompassing an individual parcel of land or industrial facility) or broadly (encompassing global timber or energy markets). How boundaries are drawn will significantly affect the potential for carbon benefit leakage. See Project Benefits Leakage.

Project Credibility: The degree to which the basic concepts on which a project's CO2 benefits are based are plausible and robust. Issues relating to credibility include project simplicity, leakage, additionality, and the scientific and technical basis for a project.

Project Emissions, Direct: Greenhouse gas emissions that are released from sources on the site of a project. Examples include CO2 emissions from fuel burned on-site, methane emissions from on-site coalbeds, carbon sequestered on-site.

Project Emissions, Indirect: Greenhouse gas emissions that are released from sources not on the site of a project. Examples include CO2 reductions from a power plant as a result of an electricity DSM program or upstream fugitive natural gas emissions from fuel conversion.

Project Implementation Case: The project implementation case starts from the baseline and projects future emissions or sequestration (or both) within the project boundary with the carbon offset project in place.

Project Benefits Leakage: The presence of market, behavioral, or physical feedbacks to a project's implementation that can result in the loss of some or all of a project's projected carbon benefits. For example, a residential weatherization project would not reduce the anticipated level of CO2 emissions if residents turn their thermostats up to a higher temperature than they would have without the weatherization. A reforestation project's benefits could leak if other landowners reduce the tree planting they would otherwise undertake. The number of potential leakage points, as well as the likelihood and magnitude of the potential leakage, will affect the project's credibility.

Project Monitoring and Verification: Refers to activities to monitor and verify the carbon benefits projected for a project. Can use funder or third-party processes.

Project Quantifiability: The ability to obtain accurate estimates of the CO2 benefits associated with an offset project. Quantifiability can vary widely by offset type and project boundary, and can involve direct, modeled, or proxy measurement. The credibility of a project can be affected by how easy it is to quantify.

Project Reference Case: The project reference case starts from the baseline and projects emissions and sequestration inside the project boundary without the carbon offset project. The reference case should include foreseeable regulatory and economic changes from the baseline condition (i.e., a requirement to cap landfills). The project reference case is also known as the "but for" case or the "alternative case." Section 1605 defines two types of reference cases for reporting greenhouse gas emissions: basic and modified. A basic reference case uses only historical values to represent future emissions and sequestration. A modified reference case uses additional information to project future emissions and sequestration.

Project Reliability: Refers to the likelihood that the offset project will be implemented as intended and that it will achieve the anticipated CO2 benefits. Involves assessment of the project's design and implementation; performance of analogous projects; prevailing social, political, and economic situations; and identified risk variables. While credibility concerns the project concept, reliability focuses more on the likely realities of project implementation.

Reforestation: Generally refers to planting trees on land that has been cleared of forest within the relatively recent past. May or may not refer to planting trees on land that has just been harvested.

Risk Factor: A parameter indicating the probability of achieving all intended offset benefits. A risk factor of 1.0 would indicate a risk-free project. A risk factor of 0.75 would indicate a probability that only 75 percent of the intended offset benefits would on average be realized.

Soil Carbon: The amount of carbon stored in soil biomass and organic matter.

Supply Side Energy Efficiency Improvements: Similar to demand side management, but refers to measures that reduce the amount of fuel required per unit of energy produced and supplied.

U.S. Initiative on Joint Implementation (USIJI): In an attempt to lead and guide international policy relating to joint implementation, the United States undertook the U.S. Initiative on Joint Implementation in 1994. The USIJI program was designed in part to test criteria that might later be applied to an international JI program. It was also designed to increase private sector investment in developing countries and provide an opportunity for expanding markets for environmentally beneficial technologies. Projects eligible for USIJI consideration were identified as those involving renewable energy, forestry, agriculture, demand and supply side efficiency, industrial emissions, transportation, and methane reduction.

Urban Forestry: In the context of carbon offsets, tree planting undertaken in urban areas to provide shade and insulation to buildings and residences, reducing the energy required for heating and cooling. CO2 emissions reductions are accomplished through sequestration in the trees and reduced energy demand.


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