Carbon Market Glossary

REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is a global initiative aimed at reducing climate change by encouraging developing countries to cut emissions from deforestation and forest degradation. It also includes the conservation and enhancement of forest carbon stocks and the sustainable management of forests.

ALM (Agricultural Land Management) refers to land management practices that aim to increase productivity while reducing GHG emissions. This includes techniques such as crop rotation, no-till farming, integrated pest management, and soil conservation practices. ALM projects can generate carbon credits by sequestering carbon in the soil and improving land use efficiency. These credits can be purchased by individuals and companies as part of their environmental impact reduction strategies, promoting agricultural sustainability and food security.

ARR (Afforestation, Reforestation, and Revegetation) refers to the planting of trees in areas that were not previously forested, the recovery of degraded forests, and the restoration of native vegetation. These activities enhance carbon capture, improve biodiversity, and generate ecological and socioeconomic benefits. ARR projects generate carbon credits by sequestering CO₂ from the atmosphere. These credits can be purchased by individuals and companies as part of their environmental impact reduction strategies, contributing to climate change mitigation and ecosystem restoration.

The baseline refers to the reference scenario against which a project’s emission reductions are measured. It represents the level of emissions that would have occurred in the absence of the project. Establishing a reliable baseline is critical for quantifying emission reductions and ensuring the environmental integrity of the carbon credits issued.

Carbon credits are certificates that represent the verified and proven reduction of carbon dioxide (CO₂) or its equivalent in other GHGs. Each carbon credit corresponds to one metric ton of CO₂ equivalent that was either removed from or not released into the atmosphere. Credits can be generated in various ways, such as through conservation or reforestation projects, carbon removal, waste management, and sustainable agriculture.

There are more than 170 recognized types of carbon credits, which are traded in both voluntary and compliance markets and purchased by individuals and companies aiming to offset emissions while transitioning their operations toward net zero. Once sold to the final client, credits are retired—meaning they can never be traded again—to avoid double counting the same ton of carbon.

A carbon footprint refers to the total amount of greenhouse gas (GHG) emissions caused directly or indirectly by a person, organization, event, or product. It is measured in metric tons of carbon dioxide equivalent (tCO₂e) and includes emissions from sources such as fossil fuel combustion, industrial production, and electricity use. Reducing the carbon footprint is essential to mitigating climate change.

The carbon market is a system where companies can buy and sell carbon credits to meet greenhouse gas emission reduction targets. There are two main types of carbon markets: compliance and voluntary. In compliance markets, such as the European Union Emissions Trading System (EU ETS), governments set mandatory emission caps and allow the trading of emission allowances. In voluntary markets, companies and individuals purchase carbon credits to offset their emissions on their own initiative.

In Brazil, the carbon market is developing and gaining momentum. Brazilian legislation is evolving to incorporate carbon market mechanisms, with initiatives such as the Brazilian Carbon Credit Certification Program (PBCC). The country is also involved in international agreements like the Paris Agreement, committing to GHG emission reductions. Brazil’s national carbon market regulations are still under development, with ongoing discussions about implementing a national emissions trading system.

The CCB Standards (Climate, Community & Biodiversity) are a set of criteria used to assess the climate, social, and biodiversity benefits of forest projects. Projects that meet these standards demonstrate positive contributions to the climate, local communities, and biodiversity conservation, increasing their credibility and appeal in the carbon market.

Emission offsetting is the process of purchasing and retiring carbon credits in an amount equivalent to the emissions generated by a given activity. When part of a broader decarbonization plan, emission offsetting amplifies the environmental contribution of individuals and companies by funding projects that prevent deforestation, support forest-based communities, and restore degraded land.

Emission reduction involves actions and strategies implemented to decrease the amount of greenhouse gases released into the atmosphere. This may include improvements in energy efficiency, the adoption of renewable energy sources, and changes to industrial processes. Reducing emissions is one of the most effective approaches to tackling the climate crisis and promoting sustainability.

An emissions inventory is the detailed accounting of all GHG emissions generated by an entity over a specific period. This process includes identifying emission sources, quantifying emissions, and producing reports. Having an accurate inventory is essential for setting reduction targets and tracking progress in climate change mitigation.

GHG emissions are released by human activities such as transportation, agriculture, and industrialization. The main greenhouse gases include carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O). These gases trap heat in the atmosphere, contributing to global warming and climate change. Monitoring and reducing GHG emissions is vital to protecting the environment.

Nature-Based Solutions (NbS) are strategies that harness natural processes to address environmental challenges such as climate change, pollution, and biodiversity loss. Examples include ecosystem restoration, forest conservation, and sustainable land management. NbS offer multiple benefits, including carbon sequestration, habitat protection, and improved water quality.

REDD+ is a global initiative aimed at mitigating climate change by encouraging developing countries to reduce emissions from deforestation and forest degradation. It also includes the conservation of forest carbon stocks, sustainable forest management, and the enhancement of carbon reserves. REDD+ projects generate carbon credits that can be purchased by individuals and companies as part of their environmental impact reduction strategies. These credits help fund forest protection and restoration, contributing to biodiversity conservation and the sustainable development of local communities.

The VCS (Verified Carbon Standard) is one of the leading global standards for certifying carbon emission reduction projects. Developed by Verra, the VCS ensures that projects are rigorously assessed, verifiable, and transparent, providing confidence to carbon credit buyers. Projects certified under the VCS contribute significantly to climate change mitigation.

Verra is an organization that develops and manages global certification standards for sustainability projects, including the Verified Carbon Standard (VCS). These standards were created to ensure that carbon reduction and environmental conservation projects are robust, transparent, and verifiable—fostering trust and integrity in the carbon market.