There are many new acronyms and jargon surrounding carbon. Add these to your vocabulary and you will be better informed.
Additonality
If a project would not have gone ahead in the absence of funding it is ’additional’. Criteria to assess ’additionality’ include whether the project is financially viable without carbon funding, whether the project is required by legislation in the country and whether the project is common practice.
Annex 1 countries
These are the industrialised countries that have targets to reach under the Kyoto Protocol.
Biomass energy
Trees and plants absorb CO2 as they grow and this biomass is burnt to provide energy for many people around the world. If it is cut and cannot or does not re-grow, then it is being harvested unsustainably and is therefore non-renewable. The CO2 released in burning also adds to the concentrations in the atmosphere. But if plants grown for energy are replanted, then the process is carbon neutral (i.e. the plants absorb CO2, it is released again when burnt but new plants absorb more). If this happens properly biomass can be seen as a renewable energy.
Carbon capture
Within a decade the UK could capture and store carbon emissions under the North Sea as part of a plan to reduce emissions from power plants by 85%. The UK government has announced £25 million funding to enable power stations and oil rigs to retain their gas emissions and pump them under the sea into old oil and gas reserves.
Although burying CO2 is not unique (Norway’s Statoil Company has buried CO2 under the North Sea for the past ten years) the UK initiative would embrace new techniques. Power stations and large industrial plants are ideal for carbon capture and storage; they cause more than a third of the UK’s total emissions, and the CO2 gas can actually be separated from other gases. There are enormous technical issues and costs could be exorbitant.
Carbon funding
Investors can pay a project developer in return for ownership of the emissions reductions achieved by that project over a certain time period. Funding can be capital at the start of a project or income over the life of the project or a mixture of the two.
Carbon offsets
Carbon offsets enable people and organisations to reduce their carbon footprint. Carbon Offsets allow carbon dioxide, one of the main greenhouse gases, to be taken out of the atmosphere or reduced in another part of the world. There are various schemes including tree planting. Trees breathe in carbon dioxide and breathe out oxygen (a process known as carbon sequestration) and so planting more helps the planet. It is also possible to purchase carbon dioxide credits and then not use them. This stops other people, organisations and countries using them.
Another technique is to donate to companies or organisations that are researching and developing renewable and sustainable technologies. Buying energy efficient technologies and donating them to developing companies is another alternative.
Certified emissions reductions (CERS)
Once a project has been validated and emissions reductions verified, CERs are issued. Once a project has been properly validated and emissions reductions have been their Kyoto targets or by companies to trade in the EU Emissions Trading Scheme. The purchasing company surrenders the CERs to government as part of the company’s emission target.
Clean development mechanism (CDM)
These allow Annex 1 countries that have Kyoto targets to make emissions reductions overseas in non Kyoto countries and count those reductions towards their own legal commitments.
Clear skies
This scheme has now closed and been replaced by the Low Carbon Building Programme. But the idea was to give government grants towards the cost of installing small-scale renewable energy devices.
Climate change levy
This is a business tax on the use of energy. It applies to electricity, gas, coal and LPG (but not petrol, diesel and petrol which are taxed separately). It aims to provide an incentive to increase energy efficiency and to reduce carbon emissions. Introduced on April 1st 2001 under the Finance Act 2000, CCL was forecast to cut annual emissions by 2.5 million tonnes by 2010, and forms part of the UK’s initiative. Electricity generated from renewables and approved cogenerations schemes is not taxed. Electricity from nuclear is taxed even though it causes no direct carbon emissions. The levy will now rise annually in line with inflation. (See below).
Climate change levy agreements
Large users of energy are given an 80% reduction in their Climate Change Levy bill in return for improvements in energy efficiency. Representative trade associations (e.g. paper, steel and glass making) sets a level of energy efficiency its members must adhere to.
EU emissions trading scheme (EU ETS)
This scheme was designed as a pan-European market mechanism to deliver reductions in Europe’s CO2 emissions. Allowances (EUAs) are given to significant producers of CO2 (e.g. steel works, cement factories, generating units etc) each year. They have to report how much CO2 they have produced, and these are audited. If companies reduce emissions below this cap they can sell to those who have exceeded their targets. They are very heavily fined if they go above their limit. However the EU states granted 44.2 million tonnes more in allowances than used by their industries in 2005!
Global warming potential (GWP)
This is used to compare the abilities of different greenhouse gases to trap heat in the atmosphere. It is not just the heat-absorbing ability of each gas relative to carbon dioxide but also the amount removed from the atmosphere over a given number of years, relative to that of CO2. Thus various gases have a common measure denominated in carbon or carbon dioxide equivalents.
Gold standard
This is awarded to CDM projects that have higher sustainable development credentials than required by the CDM rules.
Greenhouse gases
These are gases that contribute to the ‘greenhouse effect’, trapping heat from the sun in the earth’s atmosphere. Carbon dioxide is that main greenhouse gas – others include methane and Nitrous Oxide.
Kyoto protocol
This was signed in 1997 and laid out targets for the industrialised countries to reduce their greenhouse gas emissions. The Kyoto Agreement is a framework laid down by 38 developing countries to prevent global warming (US, China and Australia did not join) The Kyoto overall target was an 8% reduction in greenhouse gases between 2008 and 2012.
Each country has its own target and the UK has committed to a national reduction of 20% before 2012. The Kyoto Agreement came into force on 21st February 2005 and reaction has been mixed. Environmentalists say it doesn’t go far enough and industrialists are concerned that the reductions will hinder economic development – especially as China and the USA opted out). On the one hand strict environmental regulations may be costly but on the other a demand for cleaner technologies is also thought to create new jobs and business opportunities.
Low carbon buildings programme (LCBP)
LCBP provides grants for microgeneration technologies. Householders, community organisations, not for profit sector and private businesses can apply.
New UK standards
The new standards will be based only on projects that use carbon credits as devised by the UN’s Kyoto Protocols and the EU Emissions Trading Scheme, known as Certified Emission Reductions (CERS) rather than a form of carbon credit called Verified Emissions Reductions. The key at present is less the type of scheme and more how projects are assessed to meet international standards. Many small schemes like installing more efficient cookers in developing nations are not certified under Kyoto. Critics argue the proposed standard will eliminate the voluntary sector.
The carbon trust
This not for profit company was set up by the government in 2001. It advises businesses on how to reduce the amount of energy they use.
UK emissions trading scheme
In 2002 33 companies voluntarily took on a legally binding obligation to reduce their emissions and began trading under the scheme, which is run by DEFRA.
Verified emissions reductions (VERS)
VERS are not traded between governments and do not at present come under the new government initiative. They generally deal with smaller scale, voluntary, inspiring projects, often in the world’s poorest countries. While CERs were designed to help nations meet their emissions targets, VERS are often seen as having greater pulling power with the public. If people want to feel they are doing social and environmental good rather than just contributing to international emissions targets, they need to consider VERs. Typically they offer the consumers the chance to invest in smaller, green initiatives rather than the power stations and refrigerator dismantling plants that currently dominate the CER market.
