Learn more about the state and trends in international carbon markets "State and Trends of Carbon Pricing: International Carbon Markets"n markets, technology, and a resilient future"
Learn more about the state and trends in international carbon markets "State and Trends of Carbon Pricing: International Carbon Markets"n markets, technology, and a resilient future"
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Glossary of Terms icon

Glossary of Terms

Business As Usual (BAU)

Business as usual is used to describe GHG emissions scenarios numbers if no additional climate action is taken, and is often used as a baseline or counterfactual.

Conservative (Crediting) Baseline

A conservative crediting baseline sets the highlest level GHG emissions produced from a crediting program at a lower level than a BAU baseline.

Corresponding Adjustment (CA)

A corresponding adjustment means that when one country sells emission reductions to another, it must adjust its own emissions figures accordingly. In other words, it must increase its level of emissions reductions in its NDC to make up for the fact that it sold some emission reductions to another country. Conversely, the country that purchased the credit adjusts its own emissions reductions level downward.

Environmental Integrity

Environmental integrity is ensured as long as global greenhouse gas (GHG) emissions do not increase as a result of transfers of mitigation outcomes (MOs) (when compared to the scenario where such transfers did not take place).

Green House Gas (GHG)

Greenhouse gases are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, the atmosphere itself and by clouds. This property causes the greenhouse effect. Water vapour (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4) and ozone (O3) are the primary GHGs in the Earth’s atmosphere.

Hot Air

Carbon credits that do not represent real GHG emission reductions.

Issuing country

A country that hosts the mitigation activity and issues the MOs generated from the mitigation activity that can be transferred.

Mitigation Outcome (MO)

Mitigation outcomes are emission reductions, removals or avoided emissions.

Nationally Determined Contribution (NDC)

NDCs are national climate plans highlighting climate actions, including climate related targets, policies and measures governments aims to implement in response to climate change and as a contribution to global climate action.

NDC Stringency

The emissions level that the country aims to achieve based on its NDC. The NDC stringency should be an emissions target that results in less emissions than business as usual. A stringent NDC is transparently disclosed and independently assessed by a third party to be more stringent than Business As Usual (BAU).

Overselling Risk

Overselling/overtransferring means selling/transferring a volume of MOs that is greater than the actual GHG emissions reductions achieved by the mitigation action. Overselling risk refers to the possibility of the sale of ITMOs preventing a country from meeting its NDC goals.

Paris Agreement

The Paris Agreement is a legally binding international treaty on climate change, entering into force in 2016. Its goal is to limit global warming to well below 2 degrees Celsius, compared to pre-industrial levels.

Under Crediting

The practice of issuing fewer mitigation outcome units than the level of emission reductions achieved by a mitigation activity.

Unit Quality

From an environmental integrity perspective, the level of confidence that the face value of the MOs is correctly calculated and fairly represents the quantity of MOs created