Additionality

Criterion that assesses whether a project would not have happened without carbon finance. It is central to whether carbon credits can be considered “real” and “high integrity”.

AFOLU AFOLU (Agriculture, Forestry and Other Land Use) Project category

Family of projects related to agriculture, forestry, agroforestry, grazing and land use. Most land-based carbon projects (forestry, agroforestry, restoration) fall into this category.

Afforestation

Establishment of forest on land that has not been classified as forest for a long historical period (often 50 years). It differs from reforestation, which is the replanting of previously forested land.

Agroforestry NBS

Land-use systems that combine trees with crops and sometimes livestock on the same plot. These projects generate carbon, agricultural revenues and often strong social co-benefits.

ARR ARR (Afforestation, Reforestation and Revegetation)

Project category used by some standards (especially VCS) grouping afforestation, reforestation and revegetation. Many reforestation and tree-based projects are classified under ARR.

Article 6 (Article 6 of the Paris Agreement) Paris Agreement

Article of the Paris Agreement that governs international cooperation on emission reductions (ITMOs, market mechanisms, corresponding adjustments, etc.). It creates a link between voluntary carbon markets and countries’ climate commitments (NDCs).

Baseline (Reference scenario)

Scenario describing what would happen in the absence of the project. Emission reductions or removals are calculated by comparing the project scenario to this baseline scenario.

Above-ground biomass

Carbon stored in the above-ground parts of vegetation (trunks, branches, leaves). It is often the most visible part of forest carbon stocks.

Below-ground biomass

Carbon stored in roots. Although invisible, this pool can be significant, especially in perennial systems such as forests and agroforestry.

Buffer pool Risk & permanence

Reserve of credits set aside by a standard (e.g. Verra) to cover non-controllable risks such as fire, storms, pests or political changes. In case of carbon loss, buffer credits are cancelled to protect overall integrity.

Carbon credit

Unit representing one tonne of CO₂ equivalent (tCO₂e) avoided, reduced or removed through a certified project. Credits can be sold, transferred or retired for offsetting purposes.

Carbon leakage

Displacement of emitting activities outside the project area. For example, if deforestation is stopped in one region but shifts to another, this is considered leakage.

Carbon market

The overall system where carbon credits are traded. It includes both compliance markets (regulated) and the voluntary carbon market (VCM).

Carbon neutrality

Situation in which an entity’s greenhouse gas emissions are balanced by equivalent reductions and removals. In practice, it requires deep emission reductions first, then the use of high-integrity credits for residual emissions.

CCB Standards CCB (Climate, Community & Biodiversity)

Co-certification standards mainly used for AFOLU projects to demonstrate climate, community and biodiversity co-benefits. Often used in combination with VCS (Verra).

CCP CCP (Core Carbon Principles)

Set of principles defined by the ICVCM to determine whether a carbon credit can be considered “high integrity”, covering environmental robustness, governance, transparency and sustainable development.

CDM CDM (Clean Development Mechanism)

Market mechanism under the Kyoto Protocol that allowed generating Certified Emission Reductions (CERs) in developing countries. It is progressively being replaced by the mechanisms under the Paris Agreement (Article 6).

Co-benefits

Non-climate benefits generated by a carbon project, such as local jobs, food security, biodiversity restoration, soil protection and community empowerment.

CO₂e CO₂e (Carbon dioxide equivalent)

Common unit used to express the impact of different greenhouse gases by converting them according to their global warming potential (GWP) relative to CO₂.

Avoided deforestation

Emission reductions achieved by avoiding the conversion of forests to other land uses (agriculture, urbanisation, etc.). It is a core concept in REDD+ projects.

Carbon due diligence

Detailed assessment of a project or portfolio of credits to evaluate integrity, methodological soundness, governance, risks and financial viability before investment or purchase.

Scope 1, 2, 3 emissions

Greenhouse gas emissions classification used by the GHG Protocol: Scope 1 (direct), Scope 2 (purchased energy) and Scope 3 (value chain emissions, usually the largest share).

Emission Reductions ER

Reductions of greenhouse gas emissions achieved by a project compared with the baseline. In some standards, generated credits are called Emission Reduction units (ERs).

Project registration

Formal step at which a standard approves a project after validation of its Project Design Document (PDD). Once registered, the project can start generating credits.

Forest carbon

All carbon stocks associated with forest ecosystems, including above- and below-ground biomass, litter, deadwood and soil organic carbon. Forestry projects aim to maintain or increase these stocks.

FPIC FPIC (Free, Prior and Informed Consent)

Principle that local and Indigenous communities must be properly informed and free to give or withhold their consent to a project before it starts. It is key for legitimacy and long-term success.

GHG Protocol GHG Protocol

Widely used international standard for accounting and reporting greenhouse gas emissions by organisations and projects. It defines, among others, the Scope 1–2–3 classification.

Gold Standard GS

Carbon standard created by WWF and other NGOs, focusing on projects with strong sustainable development co-benefits. It covers energy, energy efficiency and some land-use and NBS projects.

Greenwashing

Misleading communication about environmental performance. Poor use of carbon credits, without robust decarbonisation strategies, can be perceived as greenwashing.

High integrity

Term used for carbon credits that meet strict criteria for scientific robustness, governance, transparency and impact, including alignment with the ICVCM’s Core Carbon Principles.

ICVCM ICVCM (Integrity Council for the Voluntary Carbon Market)

Independent governance body that defines the Core Carbon Principles and assesses standards and programmes against these principles to raise integrity across the voluntary carbon market.

Impact monitoring

Systematic monitoring of climate, social and biodiversity impacts of a project, going beyond carbon-only metrics.

Issuance

Process by which a standard officially issues carbon credits to a project after third-party verification. Issued credits appear in the standard’s registry.

Jurisdictional REDD+

REDD+ approach implemented at the scale of a jurisdiction (province, state, country) rather than a single project. It aims to reduce leakage and better align projects with public policies.

KPI KPI (Key Performance Indicator)

Quantitative indicator used to track progress and results, such as tCO₂e reduced or removed, area restored, number of beneficiaries, etc.

Land Degradation Neutrality LDN

Objective promoted by the UN Convention to Combat Desertification (UNCCD), aiming to halt and reverse land degradation. Many restoration and reforestation projects contribute directly to LDN.

Leakage

See “Carbon leakage”. Methodologies often require adjustment factors or discounts to account for potential leakage.

LULUCF LULUCF (Land Use, Land-Use Change and Forestry)

Sector of national greenhouse gas inventories that covers land use, land-use change and forestry. Forestry and agroforestry projects directly impact this sector.

Methodology

Official document issued by a carbon standard that defines eligibility criteria, calculation rules, data requirements and monitoring plans for a given type of project.

MRV MRV (Monitoring, Reporting, Verification)

Structured process that governs how project performance is monitored, reported and independently verified. MRV is at the heart of credibility and transparency in carbon projects.

Mitigation

All actions that reduce greenhouse gas emissions or increase removals. Carbon projects are mitigation projects by design.

NBS NBS (Nature-Based Solutions)

Solutions that use ecosystems and natural processes to address climate, biodiversity and social challenges: reforestation, agroforestry, mangrove restoration, soil management, wetlands, etc.

NDC NDC (Nationally Determined Contribution)

Climate commitment submitted by each country under the Paris Agreement. Voluntary carbon projects are increasingly expected to align with and not undermine NDCs.

Offsetting

Use of carbon credits to compensate for residual emissions, after all feasible reductions at source have been implemented. Credit retirement ensures they cannot be resold or counted twice.

Over-crediting

Situation where a project issues more credits than the actual reductions or removals achieved (for example due to an inflated baseline or poor handling of uncertainties).

Permanence

Ability of a project to maintain stored carbon over the long period defined by the standard (often 30–100 years). Non-permanence risks are managed via mechanisms such as buffer pools and risk assessments.

PDD PDD (Project Design Document)

Comprehensive technical document describing the project, its methodology, baseline, monitoring plan and impacts. It is submitted to the standard for validation and registration.

Project boundary

Geographic and operational limits of a project. They determine which emissions and carbon stocks are included in calculations and MRV.

QA/QC QA/QC (Quality Assurance / Quality Control)

Set of procedures implemented to ensure the quality, consistency and traceability of project data, measurements and reporting.

REDD+ REDD+ (Reducing Emissions from Deforestation and Forest Degradation)

International mechanism and project type that aims to reduce emissions from deforestation and forest degradation and to promote sustainable forest management, conservation and enhancement of forest carbon stocks.

Registry

Official database managed by a standard or platform, where projects, issued credits, transactions and retirements are recorded and tracked over time.

SDG SDG (Sustainable Development Goal)

One of the 17 Sustainable Development Goals defined by the United Nations. Many carbon projects highlight the SDGs they contribute to, in addition to emission reductions or removals.

Sequestration

Process through which CO₂ is captured and stored in biomass (trees, perennial crops, roots) or in soils. Reforestation and agroforestry projects are typical sequestration projects.

Carbon standard

Organisation that develops methodologies, oversees project validation and verification, manages a registry and issues carbon credits (e.g. Verra, Gold Standard, and others).

Ton-year accounting

Accounting approach that considers both the quantity of CO₂ stored and the duration of storage, rather than using a strict 100-year permanence criterion. It is still debated among scientists and practitioners.

UNFCCC UNFCCC (United Nations Framework Convention on Climate Change)

International treaty that provides the framework for global climate negotiations, including the Kyoto Protocol and the Paris Agreement.

VCM VCM (Voluntary Carbon Market)

Market where organisations and individuals voluntarily buy carbon credits to support climate projects and offset part of their emissions, outside regulatory obligations.

VCS VCS (Verified Carbon Standard)

Carbon standard managed by Verra and one of the most widely used in the world, particularly for voluntary forestry and land-use projects (AFOLU, REDD+, ARR, etc.).

Validation and verification

Validation is the ex-ante assessment of project design; verification is the ex-post assessment of actual results achieved. Both are carried out by accredited Validation and Verification Bodies (VVBs).

VVB VVB (Validation and Verification Body)

Independent audit organisation accredited by the standard to conduct validation and verification of carbon projects.

WACC WACC (Weighted Average Cost of Capital)

Weighted average cost of capital. Used in financial models to discount future cash flows and assess the profitability and bankability of carbon projects.

Net zero (Zero net emissions)

State in which anthropogenic greenhouse gas emissions are balanced by anthropogenic removals. Achieving net zero requires deep emission cuts combined with a limited, credible use of high-integrity carbon credits.