Climate change: A glossaryAnthropogenic Refers to global warming caused by human actions, rather than the natural variability of the climate.
Cap and trade Systems whereby a limit is imposed on the amount of greenhouse gas that companies may produce, and by which they are allowed to trade their quota with one another. This should, in theory, ensure that greenhouse gases are reduced at the lowest possible cost, as the cleanest companies will benefit by selling their unused quota to laggards.
Carbon dioxide equivalent Some greenhouse gases have a much more pronounced effect on the climate than others: methane, for instance, has more than 20 times the warming effect of carbon dioxide. So the stock of greenhouse gases in the atmosphere, made up of methane, carbon dioxide and other gases, is usually measured in terms of carbon dioxide, partly to make it easier to reckon their overall effect, and partly because some of the gases degrade into carbon dioxide over time. Carbon dioxide can linger in the atmosphere for about a hundred years.
CDM: Clean Development Mechanism Provision of the Kyoto Protocol by which rich countries finance the development of carbon reduction projects in the developing world in exchange for carbon credits that can be counted against developed country carbon-cutting targets.
CERs: Certified Emission Reductions Carbon credits issued under the CDM.
GHG: Greenhouse gases Gases such as carbon dioxide, methane, nitrous oxide and others that have a warming effect on the climate when released into the atmosphere. The Kyoto Protocol covers six greenhouse gases, but there are others, including water vapour.
JI: Joint Implementation Similar mechanism to the CDM, but involving carbon reduction projects in former eastern bloc countries, such as Russia. Instead of CERs, projects are awarded AAUs (Assigned Amount Units). These refer to the amount of greenhouse gas eastern bloc countries were allowed to emit under the Kyoto Protocol. As the treaty takes its baseline year as 1990, before the collapse of the Soviet Union caused widespread industrial disruption, most of these countries have Kyoto targets that allow them to increase their carbon emissions substantially, but still sell any shortfall in the form of AAUs. These credits are sometimes known as “hot air” because they do not result in carbon emission reductions.
EU ETS: EU emissions trading scheme The European Union greenhouse gas emissions trading scheme was born on January 1 2005, and covers carbon dioxide emissions from six sectors of heavy industry, including electricity generation, steel-making, cement-making, pulp and paper, and glass. Companies covered by the scheme may emit only a certain quota of carbon dioxide each year, and are issued with carbon permits for every tonne of the quota. They can trade these permits with each other. In successive phases of the scheme, the quota is reduced so that the overall emissions fall.
EUAs : European Union Allowances Carbon permits issued under the EU ETS.
UNFCCC: United Nations Framework Convention on Climate Change The parent treaty to the Kyoto Protocol.
VERs: Voluntary Emission Reductions Carbon credits that are not certified by the United Nations under the Kyoto Protocol. Some companies and individuals choose to buy carbon credits resulting from carbon-cutting projects that are not certified by the UN, in order to meet their own carbon reduction objectives.
Copyright The Financial Times Limited 2008 - reproduced for not-for-profit scientific purposes only.