Carbon terms and definitions



Assigned Amount Unit


The Global Warming Solutions Act of 2006 is a California State Law that is a central element of their greenhouse gas emissions reduction program.


Australian Competition and Consumer Commission


Accounting Framework

In reference to the National Greenhouse Accounts with are consistent with both the UNFCCC and the Kyoto Protocol provisions.The principal difference between the two accounting frameworks is the treatment of emissions and sinks from the land use, land use change and forestry sector (LULUCF).


Accounting Quantity

In relation to the Kyoto Protocol LULUCF activities that represents the addition to or subtraction from a Party’s assigned amount for a given year of the commitment period. A net removal will be added to the assigned amount while a net source will be subtracted from the assigned amount.



Australian Carbon Credit Unit – created under the Australian Government’s Carbon Credits (Carbon Farming Initiative) Act 2011 is equal to one metric tonne of carbon dioxide equivalent.



A process that generates greenhouse gas emissions.


The successful surrender, or retirement of VERs



Action that helps cope with the effects of climate change – for example construction of barriers to protect against rising sea levels, or conversion to crops capable of surviving high temperatures and drought.



Is the requirement that the reduction project reduces greenhouse gas emissions lower than the level of emissions that would have occurred in the absence of the project.



Australian Emissions Unit


Is the establishment of a forest or stand of trees in an area where there was no cover through planting, seeding and/or human-induced promotion of natural seed sources.


Australian Financial Services Licence


​The process of bringing multiple sources of carbon abatement together.

Annex 1 countries

Countries with commitments under the Kyoto Protocol to reduce emissions to 1990 levels by the year 2000 or a percentage thereof

Annex B countries

Countries with commitments under the Kyoto Protocol that have accepted targets for limiting or reducing emissions for the 2008 to 2012 commitment period.


Australian National Registry of Emissions Units

Anthropogenic climate change

Man-made climate change – climate change caused by human activity as opposed to natural processes.


Australian Securities and Investments Commission

Australian National Greenhouse Accounts

A suite of reports that track national emissions from 1990 onwards which is used to meet Australia’s reporting commitments under the UNFCCC and to track progress against Australia’s target under the Kyoto Protocol.


Emissions baselines represent the reference point against which future emissions performance will be measured under the safeguard mechanism.

Base Year

The base year emissions for Australia (547.7 Mt CO2-e) are the 1990 emissions for the energy, industrial processes, agriculture and waste sectors (Annex A sectors) and land use change as submitted to the UNFCCC in Australia’s Initial Report in October 2008.

Biomass (forest)

Forest biomass includes all parts of the tree, not only the trunk but also the bark, the branches, leaves, and roots.

‘Business-as-usual’ scenario

A description of what would most likely have occurred in the absence of a carbon offset project, also referred to as the ‘baseline scenario’.

Carbon abatement

Refers to both reducing carbon emissions released into the atmosphere, or reducing carbon already in the atmosphere through carbon sequestration.

Carbon credit

Is a market-based mechanism and is typically transacted in metric tonnes of carbon dioxide equivalent (CO2-e).  Purchasing one tonne of carbon credit means there will be one less tonne of carbon dioxide (or an equivalent greenhouse gas) in the atmosphere than there otherwise would have been.Once a carbon credit is purchased, it is retired permanently.See also ‘Carbon offset‘.

Carbon dioxide (CO2)

A naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes.

Carbon dioxide equivalent (CO2-e)

Is the internationally recognised measure of greenhouse emissions and allows other greenhouse gas emissions to be expressed in terms of CO2 based on their relative global warming potential (GWP).

The following gases are included under the term CO2-e:

  • Greenhouse Gas                    GWP
  • Carbon dioxide (CO2)               1
  • Methane (CH4)                          21
  • Nitrous oxide (N2O)                   298
  • Hydrofluorocarbons (HFCs)     124 – 14,800
  • Perfluorocarbons (PFCs)          390 – 12,200
  • Sulphur hexafluoride (SF6)        23,900
  • Nitrogen trifluoride (NF3)          17,200

CFI (Carbon Farming Initiative)


The scheme for the issue of Australian carbon credit units in relation to eligible offsets projects established by the Carbon Credits (Carbon Farming Initiative) Act 2011.

Carbon capture and storage

The collection and transport of concentrated carbon dioxide gas from large emission sources, such as power plants. The gases are then injected into deep underground reservoirs. Carbon capture is sometimes referred to as geological sequestration.

Carbon footprint

The total set of greenhouse gas (GHG) emissions caused by an organisation, event or product in a given time frame.

Carbon intensity

A unit of measure. The amount of carbon emitted as unit of production or output eg per $M revenue, FTE or per M2 floor area

Carbon market

The term for a trading system through which entities may buy or sell units of greenhouse-gas emissions in an effort to meet their compliance or voluntary emission abatement requirements

Carbon neutrality

Carbon neutrality, or having a net zero carbon footprint, refers to achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered, avoided or offset.

Carbon offset

An offset is an action that prevents or reduces carbon dioxide from being released into the atmosphere or removes carbon dioxide from the atmosphere. Carbon credits or offsets are typically measured in tonnes with 1 offset unit equalling 1 tonne of carbon dioxide equivalent. Offsets can be generated from projects such as renewable energy (prevent emissions from burning coal or gas) or waste gas recovery (prevent emissions from methane released from landfills).

See also carbon credit.

Carbon offset project

A third party verified project which utilises proven clean technologies including, hydropower, wind power and methane capture, to generate carbon offsets.

Carbon offset standard

A standard that helps to ensure that carbon offset projects meet certain quality requirements, such as additionality and third party verification. Several offset standards exist within the voluntary and compliance carbon markets and each has a different set of requirements depending on its focus and scope.

Carbon sink

Any process, activity or mechanism that removes carbon from the atmosphere. The biggest carbon sinks are the world’s oceans and forests, which absorb large amounts of carbon dioxide from the Earth’s atmosphere.

Carbon units

Carbon units are created under the (Australian Governments) Clean Energy Act

Climate change

A pattern of change affecting global or regional climate, as measured by yardsticks such as average temperature and rainfall, or an alteration in frequency of extreme weather conditions. This variation may be caused by both natural processes and human activity. Global warming is one aspect of climate change.

Climate Change Authority (CCA)

Department of the Australian Government that provides independent advice on the operation of emissions reduction targets, caps and trajectories, and other Australian Government climate change initiatives.

Clean Development Mechanism (CDM)

Under the Kyoto Protocol, the CDM allows a country with an emission-reduction or emission-limitation commitment to implement an emission-reduction project in developing countries.


Clean Energy Finance Corporation


Certified Emissions Measurement And Reduction Scheme

Certified Emission Reduction Unit  (CER)

A type of emission unit created by a Clean Development Mechanism (CDM) project.

Carbon Farming Initiative (CFI)

Carbon Farming Initiative allows Australian farmers and land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land.


Methane, second most emitted greenhouse gas with a 100 year global warming potential of 21

Climate Active Carbon Neutral Standard

Climate Active is an Australian Government voluntary certification standard and initiative to provide guidance on how to measure, reduce, offset, report and audit emissions for organisations, products & services, events, precincts and buildings.

Climate Change

A change in global climate attributed directly or indirectly to human activity and in addition to natural climate variability observed over comparable time periods.

Compliance carbon market

The segment of the carbon market for carbon offset transactions which meet regulatory requirements i.e. offsets purchased by governments and organisations to meet Kyoto targets.


Conference of the Parties


See Carbon dioxide equivalent


Carbon Pricing Mechanism

​Crediting Period Start Date

The date when the crediting period for a project begins which is when the project is declared an eligible offsets project


Department of Climate Change and Energy Efficiency (now the Department of the Environment)


The permanent removal of standing forests that can lead to significant levels of carbon dioxide emissions.


The transfer of an amount of carbon credits by a Seller to the Buyer’s registry account

Double counting

When two or more individuals or organisations claim ownership of specific emission reductions or carbon offsets.


Emissions-Intensive Trade-Exposed

Emission factor

The average emission rate of a greenhouse gas emitted per unit of a specified activity.

Emission avoidance

​Refers to projects that generate abatement by reducing or avoiding emissions.

Emissions trading

A market-based approach by a country to controlling pollution by providing economic incentives for reducing the emissions of pollutants


The Emissions Reduction Fund is a scheme where the Government purchases the lowest cost abatement (in the form of Australian carbon credit units) from a wide range of sources, providing an incentive to businesses, households and landowners to proactively reduce their emissions.


Emission Reduction Unit

Fugitive emissions

Fugitive emissions involve the release of non-combustion, greenhouse gases arising from the production and delivery of fossil fuels.

Global warming

The increase in the average temperature of the Earth’s surface as a result of the accumulation of greenhouse gases in the atmosphere

Global Warming Potential (GWP)

Represents the relative warming effect of a unit mass of a greenhouse gas compared with the same mass of CO2 over a specific period.  It is used in the calculation of CO2-e.

Gold Standard

Means the Gold Standard Foundation a non profit foundation established under Swiss Law. 

Greenhouse gas (GHG)

The atmospheric gases responsible for causing global warming and climate change: carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), hyrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). Emissions from these gases are reported under the Kyoto Protocol and aggregated into carbon dioxide equivalents (CO2-e) using their global warming potentials (GWPs).

The GHG Protocol for Project Accounting

The document “The GHG Protocol for Project Accounting” is available from


Hydrofluorocarbons. Used in refrigeration and other processes, they have a 100 year global warming potential from 124 to 14,800.

Intergovernmental Panel on Climate Change (IPCC)

The IPCC assesses the scienctific, technical and socio-economic information relevant for the understanding of the risk of human-induced climate change.

Inventory year

The year in which emission occur.  The Australian inventory is reported for Australian fiscal years as key data sources obtained from national statistical agencies are published on this basis.


Joint implementation

Kilowatt hour (​kWh)

A  measure of electrical energy equivalent to a power consumption of 1000 watts for one hour.

Kyoto Protocol

An international agreement linked to the United Nations Framework Convention On Climate Change (UNFCCC) that requires industrialised country signatories to meed GHG emission reduction targets relative to their 1990 levels.


Refers to the situation where a carbon offset project in one area inadvertently, directly or indirectly, triggers an activity which counteracts the carbon effects of the initial activity.


Liable Entities Public Information Database


Refers to Land Use, Land-Use Change, and Forestry. Activities in LULUCF provide a method of offsetting emissions, either by increasing the removal of greenhouse gases from the atmosphere (i.e. by planting trees or managing forests), or by reducing emissions (i.e. by curbing deforestation and the associated burning of wood).

Megawatt hour (MWh)

A measure of electrical energy equivalent to a power consumption of 1000 kilowatts for one hour.

Method / Methodology

The instrument that explains how to carry out and calculate a greenhouse gas inventory and related emissions.


In the context of climate change, a human intervention to reduce emissions or remove greater amounts of carbon dioxide from the atmosphere.


Measurable, reportable and verifiable


Nitrous Oxide, commonly known as laughing gas, has a 100 year global warming potential of 298


Nationally appropriate mitigation actions

National Carbon Offset Standard (NCOS)

Refer to Climate Active Carbon Neutral Standard.

National Greenhouse and Energy Reporting Scheme (NGERS)

Australian standard to provide data and accounting in relation to greenhouse gas emissions and energy consumption and production.


Agencies, non-governmental organizations, and Governments not Parties to the Convention which are permitted to attend, but not vote, at meetings of the COP, the CMP and the subsidiary bodies.

Operational control

An entity is considered to have operational control over a facility if it has authority to introduce and implement operating and environmental policies.


Over the Counter


A length of time that a sequestration project must maintain carbon stores.


Perfluorocarbons. Potent green house gases introduced as ozone depleting alternatives. They have a 100 year global warming potential from 6,500 to 9,200


Quantified Emissions Limitation and Reduction Commitments


​A market-based instrument that certifies the bearer owns one megawatt-hour (MWh) of electricity generated from a renewable energy resource. Once the power provider has fed the energy into the grid, the REC receive can then be sold on the open market as an energy commodity. Renewable energy certificates are divided into two certificate types and reclassified as large-scale generation certificates (LGCs) and small-scale technology certificates (STCs).


Reducing Emissions from Deforestation and Forest Degradation.


Reforestation is the direct human-induced conversion of non-forested land to forested land through planting, seeding and/or human-induced promotion of natural seed sources, on land that was forested but that has been converted to non-forested land.

Regional Greenhouse Gas Initiative (RGGI)

The RGGI is the first United States market-based regulatory program to reduce greenhouse gas emissions.


A publicly accessible database that tracks ownership of carbon offsets over their lifetime.


To permanently remove carbon offsets from market to ensure that they are not re-sold.

Offsets are usually retired by giving them individual serial numbers and placing them in an official registry.

Removal Unit (RMU)

Under the Kyoto Protocol, a removal unit is equal to 1 metric tonne of CO2-e generated by LULUCF activities.

Renewable energy

Energy created from sources that can be replenished in a short period of time. The five renewable sources used most often are: biomass (such as wood and biogas), the movement of water, geothermal (heat from within the earth), wind, and solar.

Scope 1 emissions

All direct greenhouse gas emissions such as fuel combustion for electricity generation

Scope 2 emissions

Indirect greenhouse gas emissions from consumption of purchased electricity, heat or steam.

Scope 3 emissions

Other indirect emissions not owned or directly controlled by the reporting entity that occur in the value chain of the reporting entity.


Sulphur hexafluoride. Is an extremely potent greenhouse gas and an excellent electrical insulator. It has a 100 year global warming potential of 23,900.


Refers to abatement generated by removing carbon dioxide from the atmosphere and storing it as carbon in plants as they grow.


Any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere. Forests and other vegetation are considered sinks because they remove carbon dioxide through photosynthesis.


Any process or activity that releases a greenhouse gas, an aerosol or a precursor of a greenhouse gas into the atmosphere.

United Nations Framework Convention on Climate Change (UNFCCC)

The UNFCCC is an international environmental treaty with the objective to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

Unique ownership

The concept of clear ownership rights to the emission reductions that a carbon offset represents, to avoid more than one individual or organisation claiming the benefit of the reduction. See double counting and retire.


An independent assessment of a carbon offset project design by an accredited third-part auditor that occurs before the project commences.


An independent assessment of a carbon offset project and the quantification of actual emission reductions achieved conducted by an accredited third-party auditor after the project has commenced.

Verified Carbon Units (VCUs)

Under the Verified Carbon Standard, projects are issued unique carbon credits know as Verified Carbon Units (VCUs).  VCUs exist only in the registry accounts and ownership can only be transferred between VCS registry account holders. VCUs cannot be transferred via other databases or paper certificates.

Verified emission reduction (VER)

Verified Emission Reductions (VER) – a carbon credit created by a project which has been verified outside of the Kyoto Protocol. One VER corresponds to one tonne of CO2e emission reductions.


The corresponding year in which the emission reductions that a carbon offset represents were created.

Voluntary carbon market

The segment of the carbon market for carbon offset transactions outside of government-related regulatory schemes i.e. offsets purchased by organisations wishing to offset their carbon on a voluntary basis.

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