Carbon emission tradingEmission trading (ETS) for carbon dioxide (CO2) and other greenhouse gases (GHG) is a form of carbon pricing; also known as cap and trade (CAT) or carbon pricing. It is an approach to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.
Emission intensityLife-cycle greenhouse gas emissions of energy sources An emission intensity (also carbon intensity or C.I.) is the emission rate of a given pollutant relative to the intensity of a specific activity, or an industrial production process; for example grams of carbon dioxide released per megajoule of energy produced, or the ratio of greenhouse gas emissions produced to gross domestic product (GDP).
Carbon offsets and creditsA carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. A carbon credit or offset credit is a transferrable financial instrument (i.e. a derivative of an underlying commodity) certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. Both offsets and credits are measured in tonnes of carbon dioxide-equivalent (CO2e).
Carbon taxA carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more severe weather events. In this way, they are designed to reduce greenhouse gas emissions by increasing prices of the fossil fuels that emit them when burned. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive.
Greenhouse gas emissionsGreenhouse gas emissions (abbreviated as GHG emissions) from human activities strengthen the greenhouse effect, contributing to climate change. Carbon dioxide (), from burning fossil fuels such as coal, oil, and natural gas, is one of the most important factors in causing climate change. The largest emitters are China followed by the US, although the United States has higher emissions per capita. The main producers fueling the emissions globally are large oil and gas companies.
Low-carbon powerLow-carbon power is electricity produced with substantially lower greenhouse gas emissions than conventional fossil fuel power generation. The energy transition to low-carbon power is one of the most important actions required to limit climate change. Power sector emissions may have peaked in 2018. During the first six months of 2020, scientists observed an 8.8% decrease in global CO2 emissions relative to 2019 due to COVID-19 lockdown measures. The two main sources of the decrease in emissions included ground transportation (40%) and the power sector (22%).
Carbon priceCarbon pricing (or pricing) is a method for nations to address climate change. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the combustion of coal, oil and gas – the main driver of climate change. The method is widely agreed and considered to be efficient. Carbon pricing seeks to address the economic problem that emissions of and other greenhouse gases (GHG) are a negative externality – a detrimental product that is not charged for by any market.
Embedded emissionsOne way of attributing greenhouse gas (GHG) emissions is to measure the embedded emissions of goods that are being consumed (also referred to as "embodied emissions", "embodied carbon emissions", or "embodied carbon"). This is different from the question of to what extent the policies of one country to reduce emissions affect emissions in other countries (the "spillover effect" and "carbon leakage" of an emissions reduction policy). The UNFCCC measures emissions according to production, rather than consumption.
Carbon capture and storageCarbon capture and storage (CCS) is a process in which a relatively pure stream of carbon dioxide (CO2) from industrial sources is separated, treated and transported to a long-term storage location. For example, the carbon dioxide stream that is to be captured can result from burning fossil fuels or biomass. Usually the CO2 is captured from large point sources, such as a chemical plant or biomass plant, and then stored in an underground geological formation. The aim is to reduce greenhouse gas emissions and thus mitigate climate change.
Low-carbon dietA low-carbon diet is a diet with low greenhouse gas emissions. Choosing a low carbon diet is one facet of developing sustainable diets which increase the long-term sustainability of humanity. It is estimated that the food system is responsible for a quarter to a third of human-caused greenhouse gas emissions. Major tenets of a low-carbon diet include eating a plant-based diet, and in particular little or no beef and dairy. A 2014 study into the real-life diets of British people estimated their greenhouse gas footprints in terms of kilograms of carbon dioxide equivalent per day: 7.
Carbon accountingCarbon accounting (or greenhouse gas accounting) is a framework of methods to measure and track how much greenhouse gas (GHG) an organization emits. It can also be used to track projects or actions to reduce emissions in sectors such as forestry or renewable energy. Corporations, cities and other groups use these techniques to help limit climate change. Organizations will often set an emissions baseline, create targets for reducing emissions, and track progress towards them.
Carbon budgetA carbon budget is a concept used in climate policy to help set emissions reduction targets in a fair and effective way. It looks at "the maximum amount of cumulative net global anthropogenic carbon dioxide () emissions that would result in limiting global warming to a given level". When expressed relative to the pre-industrial period it is referred to as the total carbon budget, and when expressed from a recent specified date it is referred to as the remaining carbon budget.
Allocative efficiencyAllocative efficiency is a state of the economy in which production is aligned with consumer preferences; in particular, the set of outputs is chosen so as to maximize the wellbeing of society. This is achieved if every good or service is produced up until the last unit provides a marginal benefit to consumers equal to the marginal cost of production. In economics, allocative efficiency entails production at the point on the production possibilities frontier that is optimal for society.
Carbon farmingCarbon farming is a name for a variety of agricultural methods aimed at sequestering atmospheric carbon into the soil and in crop roots, wood and leaves. The aim of carbon farming is to increase the rate at which carbon is sequestered into soil and plant material with the goal of creating a net loss of carbon from the atmosphere. Increasing a soil's organic matter content can aid plant growth, increase total carbon content, improve soil water retention capacity and reduce fertilizer use.
Energy intensityEnergy intensity is a measure of the energy inefficiency of an economy. It is calculated as units of energy per unit of GDP (Gross Domestic Product) or some other measure of economic output. High energy intensities indicate a high price or cost of converting energy into GDP. On the other hand, Low energy intensity indicates a lower price or cost of converting energy into GDP. The energy intensity of a country or region differs from its energy efficiency. Energy intensity is affected by climate, economic structure (e.
Economic efficiencyIn microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: Allocative or Pareto efficiency: any changes made to assist one person would harm another. Productive efficiency: no additional output of one good can be obtained without decreasing the output of another good, and production proceeds at the lowest possible average total cost. These definitions are not equivalent: a market or other economic system may be allocatively but not productively efficient, or productively but not allocatively efficient.
Fuel efficiencyFuel efficiency is a form of thermal efficiency, meaning the ratio of effort to result of a process that converts chemical potential energy contained in a carrier (fuel) into kinetic energy or work. Overall fuel efficiency may vary per device, which in turn may vary per application, and this spectrum of variance is often illustrated as a continuous . Non-transportation applications, such as industry, benefit from increased fuel efficiency, especially fossil fuel power plants or industries dealing with combustion, such as ammonia production during the Haber process.
Pareto efficiencyPareto efficiency or Pareto optimality is a situation where no action or allocation is available that makes one individual better off without making another worse off. The concept is named after Vilfredo Pareto (1848–1923), Italian civil engineer and economist, who used the concept in his studies of economic efficiency and income distribution. The following three concepts are closely related: Given an initial situation, a Pareto improvement is a new situation where some agents will gain, and no agents will lose.
Sustainable energyEnergy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs." Most definitions of sustainable energy include considerations of environmental aspects such as greenhouse gas emissions and social and economic aspects such as energy poverty. Renewable energy sources such as wind, hydroelectric power, solar, and geothermal energy are generally far more sustainable than fossil fuel sources.
Carbon sinkA carbon sink is anything, natural or otherwise, that accumulates and stores some carbon-containing chemical compound for an indefinite period and thereby removes carbon dioxide () from the atmosphere. These sinks form an important part of the natural carbon cycle. An overarching term is carbon pool, which is all the places where carbon can be (the atmosphere, oceans, soil, plants, and so forth). A carbon sink is a type of carbon pool that has the capability to take up more carbon from the atmosphere than it releases.
