making the carbon market work for poor communities

Carbon Dictionary

Term Description


The requirement that the greenhouse gas emissions after implementation of a carbon project activity are lower than those that would have occurred in the most plausible alternative scenario (Business as Usual scenario).


The establishment of a forest or stand of trees in an area where there was no forest.

Anaerobic digester

A tank in which organic material is broken down by microorganisms in the absence of oxygen. This process produces biogas, which can be used for cooking and lighting.


The volume of emissions that would occur in the absence of the proposed Project. Scenarios of greenhouse gas emissions in the absence of a carbon Project activity are commonly referred to as the "Baseline scenario".


Gas, rich in methane, which is produced by the decomposition of organic matter, such animal dung, human sewage or crop residues. Biogas can be used for cooking and lighting.


A renewable energy source consisting of biological material from (recently) living organisms, such as wood or agricultural waste.


The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment to invest in projects that reduce emissions in developing countries.


Certified Emission Reductions (CERs) are carbon credits produced by the Clean Development Mechanisms (CDM) projects, under the rules of the Kyoto Protocol.


Carbon Dioxide (CO2) is a colorless and odorless gas that is naturally present in air. It is produced by burning carbon and organic compounds and absorbed by plants in photosynthesis. It is the most common greenhouse gas in the atmosphere.

The Conference of the Parties (COP) is an annual conference of countries that are Party to the UNFCCC. Delegates meet to decide on how the commitments made in the Climate Change Convention are implemented.

Carbon credit

A carbon credit represents the right to emit one tonne of carbon dioxide or carbon dioxide equivalent.

Carbon dioxide equivalent

The unit of measurement used to compare the relative climate impact of the different greenhouse gases. A tonne of CO2e of any greenhouse gas has the same warming effect as a tonne of CO2.

Carbon neutral

The situation where an individual’s, organisational’s or event's carbon emissions are effectively reduced to zero through a combination of reducing energy consumption, using renewable energy and offsetting the remainder.

Certification process

The Gold Standard certification process includes identification of a potential project, local stakeholder consultation, drafting of project design document, external validation, registration, emission reduction verification and issuance of credits. See

Charismatic credits

Charismatic credits generally relate to domestic projects that not only reduce CO2 emissions, but also have several other benefits, such as environmental or health benefits. Examples can be energy-efficient cook-stove projects, domestic scale biogas technologies or solar lanterns for poor rural communities.

Climate Change

A change in global temperature and weather patterns, nowadays commonly used to refer to the increase in surface temperature of the Earth caused by human activities from the mid 20th century onwards. Modern climate change and its associated effects are due to the large amounts of CO2 being emitted into the atmosphere by burning fossil fuels.

Compliance market

The market for carbon credits used to reach emissions targets under the Kyoto Protocol. In the compliance market, companies and governments in industrialized countries buy carbon offsets to comply with their emission reduction targets.


A Designated Operational Entity (DOE) is an organisation accredited by the carbon credit standards body to validate project proposals or verify whether projects have achieved planned greenhouse gas emission reductions.

Do-No-Harm assessment

An assessment conducted by project proponents of the risk that the proposed project activity might result in negative environmental, social and/or economic impacts.


Energy Efficiency (EE) refers to activities that are aimed at reducing the energy used by a certain process or product.


An Emission Reduction Purchase Agreement (ERPA) is a legal contract for the transfer of carbon credits between a project developer and the purchaser, outlining details such as purchase price, volume, delivery date, project name, registration number and credit vintage.

Efficient lighting

Refers to energy efficient light sources, such as LED lamps.


Establishment of a forest, naturally or artificially, on an area, whether previously forested or not.

Fossil Fuels

Fuels that are formed in the Earth from plant or animal remains; e.g., coal, petroleum, and natural gas. A nonrenewable source of energy.

Global warming

A gradual increase in the overall temperature of the earth's atmosphere generally attributed to the greenhouse effect.

Gold Standard

A certification standard that certifies renewable energy and energy efficiency carbon offset projects to ensure that they all demonstrate real and permanent greenhouse gas reductions and sustainable development benefits in local communities that are measured, reported and verified. See

Greenhouse gas

Greenhouse Gases are gases in the atmosphere that absorb infrared radiation. The main greenhouse gases in the Earth’s atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone.

Hydroelectric power

Electricity generated by turbines using the energy of falling or flowing water. In most cases, water is stored behind a dam and the overflow is used for power generation.


Refers to the final step in a carbon project in which carbon credits are issued.

Joint implementation (JI)

Joint implementation is a flexibility mechanism set forth in the Kyoto Protocol to help countries with binding greenhouse gas emissions targets meet their obligations through joint projects with other developed countries, mostly in eastern Europe.

Kyoto mechanisms The mechanisms are:

  • Emissions trading (the carbon market)
  • Clean Development Mechanisms (CDM)
  • Joint Implementation (JI)
Kyoto protocol

The Kyoto Protocol is an international agreement reached in 1997 aimed at fighting global warming, with binding emission targets for developed countries. The second commitment period starts in 2013 and is agreed by the European Union. See


Land use, land-use change and forestry (LULUCF) refers to reforestation & afforestation, land clearing and agriculture. Each of these activities can make significant contributions to atmospheric carbon emissions and/or removals.


Carbon leakage occurs when there is an increase in CO2 emissions in one area or country as a result of an emission reduction in another area or country.

Local stakeholder consultation

Under the Gold Standard, the Local Stakeholder Consultation (LSC) process assesses the potential environmental and socials impacts of the project with relevant (local) stakeholders including NGOs, policymakers and local residents. The consultation sessions takes place in two rounds.


The Millennium Development Goals (MDGs) are eight international development goals that all 192 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015. See


A colorless, odorless flammable gas often used as a fuel, produced by organic matter decomposing in an environment without much oxygen. Also a greenhouse gas with a global warming potential estimated at 23 times that of carbon dioxide.


There are two types of methodologies in the CDM context:

  • Baseline methodologies. In essence, a baseline methodology is the means to estimate the emissions that would have been created in the most plausible alternative scenario to the implementation of the project activity (called the baseline scenario).
  • Monitoring methodologies The means to calculate the actual emission reductions from the project, taking into account any emissions from sources within the project boundary.
Monitoring Monitoring refers to the collection and archiving of all relevant data necessary for determining the baseline and measuring greenhouse gas emissions.

Offsetting A carbon offset is a reduction in emissions of carbon or greenhouse gases made in order to compensate for an emission made elsewhere.

Operator The organisation that runs the carbon project.

PIN The Project Idea Note (PIN) of a CDM project is written by the project developer using a specific format. It contains indicative basic information about the project, such as its objectives, location and technique used. The ‘passport’ of the Gold Standard is the equivalent of the PIN.

PDD A Project Design Document (PDD) is the key document of a project and provides information focusing on the project design and the application of the selected baseline and monitoring methodology to calculate emission reductions.

PoA A Program of Activities (PoA) is a modality under the CDM to allow replicable projects with little emission reductions into the CDM. This type of project is often link to higher sustainability benefits, but is too small to pay back transaction costs. It was expected that African countries would get a higher participation in the CDM market. For smaller voluntary projects, Gold Standard has introduced a micro-scale scheme, which can be seen as a program.

Premium For carbon credits produced by charismatic projects, a so-called ‘premium’ is often paid, resulting in a higher than average price.

Project pipeline

A summary of projects that are under development.


Renewable Energy (RE) is energy derived from the wind, the sun, the tides and other sources that cannot be depleted.


Reducing emissions from Deforestation and Forest Degradation (REDD) is a way to use market/financial incentives in order to reduce the emissions of greenhouse gases from deforestation and forest degradation. REDD credits offer the opportunity to utilize funding from developed countries to reduce deforestation in developing countries. “REDD+” goes beyond deforestation and forest degradation, and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stock.


The re-establishment of a forest cover, either naturally or artificially.


The uptake and storage of atmospheric carbon. For example trees and plants absorb carbon dioxide.

Solar power

Energy from the sun that is converted into thermal or electrical energy.


A standard is a methodology used for measuring and verifying emission reductions, to provide third party verification of emission offsets. A variety of standards exist.

Sustainable development

A pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come.


The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty produced at the United Nations Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro from 3 to 14 June 1992. The treaty is aimed at stabilizing greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.


The process of determining that the project is eligible to be registered as a carbon project, by confirming that the project meets the requirements of the standard used.


Voluntary Emission Reduction (VERs) are carbon credits exchanged in the voluntary market, i.e. outside of a legal framework.


The periodic independent review by a DOE in which the authenticity of reductions in greenhouse gas emissions is confirmed.

Voluntary market

In this market there are no caps or legal binding responsibilities to fulfill as there are in the compliance market. It usually involves buyers such as companies, individuals or organisations seeking to offset emissions for ethical reasons or branding and Public Relations. It is typical to offset emissions from events, flights, products or annual emissions.

Wind power

The conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity.