Key Terms and Glossary
This is the most important term in the entire lexicon. Without additionality, a carbon project should not exist. According to the EDF and WWF, in the context of carbon credits, emission reductions or removals from a mitigation activity are additional if the mitigation activity would not have taken place in the absence of the added incentive/funding created by the sale of carbon credits.
Other terms reference specific kinds of tests or methods used to assess additionality, such as investment analysis, barrier analysis (technological and financial), evaluation as to whether the activity is common practice without the need for sale of offsets, or whether there is a legal requirement for the project to be implemented. Some people refer to these colloquially as different “kinds” of additionality (e.g., “investment additionality” or “legal additionality”). However, they are really just different ways to make an assessment and are frequently used together to reach a final determination about whether an activity is additional. The application of these tests is validated and verified by a third-party auditor.
Of course, projects that are not supported by carbon funding can still reduce GHG emissions, but they should not be used as ‘offsets’.
When a carbon offset is sold, it can be retired so it cannot be traded, sold, or swapped again. The buyer will then receive a certificate of retirement that documents the credits and serial numbers. This ensures that only the purchaser of the carbon credit can claim the emission reduction. It also ensures that the buyer cannot claim they’ve reduced emissions and then re-sell the credit.
A contribution made by any AFOLU (Agriculture, Forestry, and Other Land Use) project made in tons during each credit issuance to the issuing registry. These tons are non-tradeable and are to be used to cover the risk of unforeseen losses in carbon stocks in the project portfolio. These tons will be used to replace any previously sold tons in the event of a reversal due to fire, pests, drought, or other events which can affect the permanence of the carbon sequestration inherent in the carbon credit sold.
The quantity of buffer pool credits is determined by a non-permanence risk analysis prepared by the project proponent and verified by a third-party auditor.
These units represent one metric ton of CO2 that has been reduced, avoided, eliminated, or sequestered from verified carbon projects, applying an approved methodology. Carbon credits are typically used to offset a buyer’s emissions (aka “carbon footprint”).
A carbon footprint is a measure of the quantified release of greenhouse gases (denominated in metric tons of CO2-equivalent — see below) reaching the atmosphere caused by an individual or entity’s activities. The largest portion of a footprint is typically (although not exclusively) produced through the burning of fossil fuels.
A carbon credit is “real” if it represents an actual net reduction or sequestration in emissions. The verification process must prove that the emission reduction does not take place because of artificial, incomplete, or inaccurate emissions accounting.
Solid Carbon Ton - the ERC-20 commodity layer with vetted forward carbon agreements
The Solid World DAO liquidity token
Gross market value
Monitoring, recording, verification
tokens represent a diverse range of digital assets, such as vouchers, IOUs, or even real-world, tangible objects. Essentially, Ethereum tokens are smart contracts that make use of the Ethereum blockchain.
One of the most significant Ethereum tokens is known as ERC-20. ERC-20 has emerged as the technical standard. It is used for all smart contracts on the Ethereum blockchain for token implementation and provides a list of rules that all Ethereum-based tokens must follow.
Polygon is a side-chain solution that augments Ethereum and drives its scalability.