KEY TERMS USED IN CARBON101X
Use the search bar below to find your key term in the list. Click on each key term to reveal its definition.
Adaptation
Actions undertaken to reduce the impact of climate change on both communities and ecosystems. The goal with adaptation actions is to either reduce the exposure to harm from climate change, or improve the resilience to climate change.
Additionality
The extent to which an emissions reduction project actually reduces emissions compared to a business-as-usual scenario. A project must be additional to be eligible to generate carbon credits.
Afforestation
Creating a new forest where none existed previously.
Allowances
In an emissions trading scheme, one allowance (or 'allowance certificate') is required for each tonne of carbon dioxide equivalent emitted.
Anthropogenic
Emissions originating from human activities.
Auction (emissions trading scheme)
A method of allocating carbon permits by which the government releases permits into the market through an auction process – allowing prices to fluctuate depending on supply and demand.
Banking (emissions trading scheme)
Under an emissions trading scheme, ‘banking’ allows a facility to carry forward their carbon credits/permits from one year to the next (this depends on the specific banking rules).
Biodiesel
Biodiesel is made from vegetable oils, animal fats or recycled greases and usually used as an additive or replacement to diesel which results in reduced levels of greenhouse gas emissions, particulates, carbon monoxide, and hydrocarbons.
Biofuel
Biofuels include bio-ethanol, biodiesel and biogas and are derived from renewable energy sources arising from plant or animal materials.
Business-as-usual (BAU)
What you would be doing ‘normally’ in the scope of business, if no carbon market, obligations, or pressure or willing to reduce emissions existed. Simply, a business would continue on as they were doing so, as if nothing had changed in their obligations and working environment.
Cap-and-trade
See 'Emissions trading scheme'.
Carbon dioxide (CO2)
The most common and abundant of the greenhouse gases that affects the earth’s temperature. It is produced as a by-product of oil and gas production, and the burning of fossil fuels and renewable biomass, as well as from all animals, plants, and a number of other natural sources. It is important to note that carbon dioxide is a fundamental gas for sustaining enough heat in the atmosphere to sustain life on earth. CO2 has a GWP of 1 and is used as a 'base' to compare other more potent greenhouse gases. It is also often referred to simply as 'carbon'.
Carbon dioxide equivalent (CO2e)
Not all greenhouse gases are created equal, and therefore a common unit is required in order to compare different greenhouse gases with each other. Carbon dioxide equivalent (CO2e) is the internationally recognised measure of greenhouse gas emissions. It is a standard unit that takes into account the different global warming potentials of the different greenhouse gases and expresses the cumulative effect in a common unit. For example, methane has a GWP of 28, meaning that 1 tonne of methane could be converted to 28 tonnes of carbon dioxide equivalent.
Carbon footprint
A calculation of the total amount of greenhouse gas emissions created by an activity, either at an individual, household or organisational level.
Carbon intensity
Emission intensity is how much of a given pollutant is emitted from a source relative to the intensity of the specific activity. An example of this is how many grams of carbon dioxide is released per megajoul of energy produced. It can also be the ratio of greenhouse gas emissions produced to gross domestic product (GDP).
Carbon leakage
Carbon leakage refers to when a decrease in carbon emissions in one place leads to increased emissions in another. This can be a result of a country implementing stringent emission policies, resulting in factories moving their production abroad. Despite there being a decreased carbon emission within the original country, the amount of emissions globally hasn't changed.
Carbon market
A trading system through which countries may buy or sell units of greenhouse gas emissions in an effort to meet their national limits on emissions, either under the Kyoto Protocol or under other agreements, such as that among member states of the European Union. This term is also used more broadly to talk about the voluntary carbon market, for example in Australia.
Carbon neutral
A voluntary mechanism where an activity, event, household, business or organisation is responsible for no net emissions of greenhouse gases and can therefore be declared carbon neutral in that specific area. Carbon neutrality can be achieved by reducing emissions and then purchasing offsets for the remaining emissions.
Carbon offset
A carbon offset is an investment in a project (or activity) that reduces greenhouse gas emissions in (or removes carbon dioxide from) the atmosphere, which is used to compensate for emissions from your own activities.
Carbon pricing mechanism
Carbon pricing mechanisms encourage climate change mitigation by imposing a financial charge on greenhouse gas emissions. A carbon price is the amount that must be paid for the right to emit one tonne of carbon dioxide equivalent into the atmosphere. Carbon pricing usually comes in two different forms: either as a carbon tax or as an emissions trading scheme.
Carbon tax
A carbon tax requires emitters to pay a fixed price for every tonne of carbon dioxide equivalent they emit. The fixed tax price provides certainty about how much releasing greenhouse gases will cost. It is up to emitters to decide how much greenhouse gas they will release. Carbon taxes provide certainty about the cost of releasing greenhouse gases, but not about the total volume that will be released.
Certified Emissions Reductions Units (CERs)
CERs are issued by the Clean Development Mechanism (CDM) for emission reduction achieved by a CDM project. One CER unit is equivalent to the reduction of one tCO2e. CERs can be used for compliance within the European Union (EU) ETS.
Clean Development Mechanism (CDM)
A mechanism under the Kyoto Protocol that allows developed countries (e.g. Australia) to invest in ventures that reduce carbon emissions in developing countries (e.g. Asia). Once a project is officially approved it can create Certificated Emission Reduction (CER) units/credits that can be bought or sold internationally and can be a lower cost offsetting option.
Clean Energy Finance Corporation (CEFC)
A fund started by the Australian government, which aims to invest in low carbon technologies and projects that will deliver a positive financial return on investment.
Climate change
Any long term change in average temperatures and weather patterns over time, whether due to natural variability or as a result of human activity.
Command-and-control
Government set policies and mandatory regulations on the level of emissions allowed from a particular activity. An example of this is setting a mandatory efficiency standard for lightbulbs.
Deforestation
Destruction or removal of forests.
Direct climate finance
An economic instrument used to promote certain purchases, investments, or behaviours through financial incentives such as grants, low interest loans, subsidies and climate bonds. For example, a government may provide a subsidy for houseowners to install solar panels, or provide funding for research in technologies that can improve energy efficiency.
Direct emissions
See 'Scope 1 emissions'.
Emissions abatement
Projects or actions an organisation can undertake in order to reduce the amount of greenhouse gas (GHG) emissions.
Emissions cap
A cap is the set limit for the total amount of greenhouse gas (GHG) emissions allowed in an emissions trading scheme.
Emissions factor
An emission factor is a value given to an emissions source in order to convert it into its carbon dioxide equivalent (CO2e). For example, in Australia, electricity has an emissions factor of 0.83 per kWh, meaning the consumption of electricity needs to be multiplied by 0.83 to obtain the CO2e.
Emissions intensity
This term refers to the ratio between the volume of greenhouse gas emissions generated and an input/output of a production process. For example, an airline may measure its emissions intensity as 0.53 tCO2e per passenger mile.
Emissions trading scheme (ETS)
A policy that places a limit on emissions (the ‘cap’), then allocates out credits or ‘permits to pollute’ to participants in the system. These participants are then allowed to trade the permits amongst themselves. This system allows those participants emitting less than their allocated quota to sell their excess permits to participants needing to buy extra permits – as they have emitted more than their allocated emissions allowance. This system determines the total amount of greenhouse gas that can be released, as each tonne of carbon dioxide equivalent is linked to an emission permit that is bought or sold.
Energy efficiency
Energy efficiency (improvements) refers to a reduction in the energy used for a given service (heating, lighting, etc.) or level of activity. Energy efficiency savings are usually achieved by substituting more advanced technology with less efficient energy consuming equipment. An energy efficient product is able to provide the same service using less energy, compared to a product with less energy efficiency.
Externalities
Indirect impacts caused by activities from one party on a third party. Emissions are commonly referred to as an externality, as the emitter does not have to pay for the social consequences created by the emissions.
Fossil fuel
Non-renewable energy sources, such as oil, gas and coal, are referred to as fossil fuels.
Fugitive emissions
Emissions that ‘escape’ a ‘system’, either intentionally or unintentionally. These gases are not physically controlled and commonly arise as a by-product of mining activities and refrigeration/cooling systems. Fugitive emissions are often due to equipment leaks, evaporative processes or windblown disturbances. Fugitive emissions are included in Scope 1 emissions.
Future vintages
Allowances which have been bought in advance of the year they are valid in.
Global warming potential (GWP)
Also known as GWP, the global warming potential is a relative measurement of the warming effect a greenhouse gas has in comparison to carbon dioxide, commonly measured in a 100-year time period.
Green climate fund (GCF)
The Green climate fund (GCF) is a global initiative which was established in 2010 under the United Nations Framework Convention on Climate Change. The fund aims to mobilise $100 billion USD/year in direct climate finance from 2020. 50% of the funds will be given to climate mitigation actions, while the other 50% will be targeting adaptation actions.
Greenhouse effect
Greenhouse gases act as a blanket over the earth’s atmosphere, reducing the heat loss back into space. The heat is reflected back to the earth’s surface resulting in a warming effect known as the ‘Greenhouse effect’.
Greenhouse gas (GHG)
A greenhouse gas (GHG) is a gas which, when emitted into the atmosphere, can impact on the earth's heat balance through absorbing long wave radiation. These gases can be emitted from both natural and anthropogenic sources. These gases include dioxide, methane, nitrous oxide, sulphur hexafluoride, perfluorocarbons and hydrofluorocarbons.
Greenhouse gas emissions inventory
See 'Carbon footprint'.
Greenhouse Gas Protocol (GHG Protocol)
The Greenhouse Gas Protocol is an internationally recognised emissions accounting and reporting standard. The GHG Protocol sets a precedent in methodology that allows information to be tracked and monitored with time, meets various internal and external reporting requirements, and provides a basis to develop effective reduction strategies.
Gross domestic product (GDP)
GDP is the monetary value of all goods and services produced within a country's borders during a specific timeframe.
Hydrofluorcarbons (HCFCs)
Hydrofluorocarbons are manmade chemical compounds. HFCs are produced commercially to replace chlorofluorocarbons, mainly used in refrigerants. HFCs have a global warming potential range from 1,300 to 11,700.
Indirect emissions
See 'Scope 2 emissions' and 'Scope 3 emissions'.
Intergovernmental Panel on Climate Change (IPCC)
The IPCC is an international body which assesses science related to human-induced climate change to help governments and policymakers in decision making.
Kyoto Protocol
An international agreement that commits member countries to reduce their greenhouse gas emissions to combat global warming. This is achieved through three flexible mechanisms: international emissions trading; the Clean Development Mechanism; and the Joint Implementation mechanism.
Marginal abatement cost
The average cost of reducing one tonne of carbon dioxide equivalent.
Marginal abatement cost curve (MACC)
A graphical tool used to illustrate the most effective method for an organisation to reduce their greenhouse gas emissions at the least cost to them.
Market failure
Market failure is an economic term to describe when the allocation of goods and services is not efficient. Externalities are caused by market failure.
Methane (CH4)
Methane is a greenhouse gas with a global warming potential of 28. Methane is emitted during production and transport of coal, natural gas and oil, and from the decomposition of biologically active wastes in landfills. Significant methane emissions also arise from farm animals or from manure.
Mitigation
Efforts to reduce the amount of greenhouse gases being emitted. Such efforts can take many different forms, but most fall under setting regulations, putting a price on carbon, or creating financial incentives to reduce emissions.
Net present value (NPV)
The NPV is a mathematical formula used to assess the profitability of undertaking a given project expressed in dollars. If the NPV is greater than zero, the financial benefit of the project outweighs its cost.
Nitrous Oxide (N2O)
Nitrous oxide is a greenhouse gas with a global warming potential of 265. It is emitted during agricultural and industrial activities, as well as during combustion of solid waste and fossil fuels.
Offset
See 'Carbon offset'.
Operational control
The organisation with operational control is generally defined as the company that has the ability to change processes and equipment, and can therefore impact on the amount of emissions emitted.
Organisational boundary
When conducting a carbon footprint, a boundary is required to define what should and shouldn’t be included in that inventory list. A boundary can have several dimensions, for example an organisational, operational, geographic, sectoral, business unit and other.
Permits
See 'Allowances'.
Project appraisal
A project appraisal is a structured process of assessing whether or not to proceed with a project based on costs, benefits, risks and alternative projects.
Reduced Emissions from Deforestation and Forest Degradation (REDD+)
REDD+ is a voluntary program for climate change mitigation developed by the United Nations Framework Convention on Climate Change (UNFCCC). Land use change represents a large share of global emissions, and REDD+ aims to financially reward developing countries for achieving emissions reductions through decreased deforestation or enhanced forest carbon stocks. The primary objective is to reduce greenhouse gas emissions, yet it can also deliver biodiversity, conservation, and poverty alleviation.
Renewable energy
Renewable energy is energy generated from resources that are constantly, naturally replenished. These include sunlight, wind, rain, tides, geothermal heat and biomass.
Safety valves
A government can set a price collar specifying a minimum and/or maximum price for which allowances can be auctioned in order to increase price predictability.
Scope
When conducting an organisation's carbon footprint, emissions are classified as either Scope 1, 2 or 3. Scope 1 includes all emissions occurring within the organisational boundary; Scope 2 includes indirect emissions from purchased electricity, heat and steam; and Scope 3 is all other indirect emissions occurring across the organisation's value chain.
Scope 1 emissions
Greenhouse gases released directly into the atmosphere from a source the reporting organisation has control over, such as the petroleum combusted in the company's vehicle fleet. ‘Fugitive emissions’ are also included as Scope 1 emissions; they occur as a byproduct of mining activities and refrigeration/cooling systems.
Scope 2 emissions
Indirect emissions released by electricity and heat generation facilities (e.g. coal fired power stations) due to the purchase of electricity and heat for your own organisation or business.
Scope 3 emissions
Indirect emissions other than energy indirect emission (Scope 2), which is a consequence of the activities of the company, but occur from sources not controlled by the company or owned by the company. For example: transport-related activities (corporate air travel), taxi use, cleaning services, postage and couriers.
Secondary market
In an emissions trading scheme (ETS), the secondary market is where allowances can be traded directly between buyers and sellers.
Sequester
The uptake and storage of carbon from the atmosphere. For example, trees and other plants sequester (‘remove’) carbon dioxide from the atmosphere as they grow, through the process of photosynthesis.
Social cost of carbon
The social cost of carbon is the uncosted economic damage done to society by each additional tonne of carbon dioxide emitted.
Surrender (emissions trading scheme)
Under an emissions trading scheme (ETS), countries or businesses are allocated carbon credits or permits, usually for a designated timeframe. They must then surrender one carbon credit for each tonne of carbon dioxide equivalent (CO2e) emitted within the relevant timeframe; this ensures the credits are not double-counted.
The Paris Agreement
The Paris Agreement, signed on Earth Day 2016, is an agreement under the United Nations Framework Convention on Climate Change (UNFCCC) to mitigate and adapt to climate change.
United Nations Framework Convention on Climate Change (UNFCCC)
UNFCCC is an international environmental treaty, with the objective to "stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system". The framework is primarily used when negotiating international treaties regarding binding limits on greenhouse gases.