Frequently Asked Questions
What is carbon?
Carbon is a chemical element that has the symbol “C” and the atomic number “6,” and has several forms. It is the basis of the chemistry of all known life. Carbon exhibits remarkable properties. It has a great affinity for bonding with other small atoms. Because of these properties, carbon is known to form nearly ten million different compounds. When combined with hydrogen, carbon forms various flammable compounds called hydrocarbons. When combined with oxygen and hydrogen, carbon can form many groups of biological compounds, such as sugars, celluloses, alcohols, fat, and aromatic esters. When combined with Nitrogen carbon forms alkaloids. When combined with Sulfur, carbon forms antibiotics, amino acids, and proteins.
How is Carbon different than Carbon Dioxide (CO2e)?
Carbon is found in many different compounds. When united with oxygen, carbon forms carbon dioxide, the most prominent oxide of carbon. Carbon dioxide is the main carbon source for plant growth. Carbon Dioxide is the reference gas against which other greenhouse gases are measured.
What do you mean by Cap and Trade?
Cap and Trade is a system that sets an overall emissions limit, allocates emissions allowances to participants, and allows them to trade emissions credits with each other.
What is a CFI?
A “Carbon Financial Instrument” (CFI) is a measurement. It can be a Chicago Climate Exchange (CCX) X Exchange Allowance (XA), Exchange Offset (XO), or Exchange Early Action Credit (XE). A CFI represents one-hundred metric tons of carbon dioxide. A CFI is issued by CCX to the Registry accounts of CCX Members or is surrendered to CCX by Members to annually achieve compliance with the CCX Emission Reduction schedule.
What is a vintage year?
The “Vintage Year” is the first Compliance Year for which a CFICarbon Financial Instrument may be used in achieving Compliance with a CCX Member’s or Associate Member’s Emission Reduction Schedule or Electricity Purchase Reduction Schedule.
What do you mean by a compliance period?
The CCX first compliance period is calendar year 2003. Each CCX member was required to have CFICarbon Financial Instrument contracts in its CCX Registry in an amount equal to its verified emissions for the year 2003. One CFI is equivalent to 100 metric tons of carbon dioxide. The first Kyoto compliance period is 2008-2012.
What is additionality?
Additionality means that the project would not have occurred were it not for the prospect of receiving additional proceeds from the sale of offsets. Additionality is a requirement established by the Kyoto Protocol that Joint Implementation and Clean Development Mechanism projects may only count emissions reductions that are “additional to what otherwise would have occurred in the absence of the certified project activity.” If a project would not have gone ahead without funding it is considered “additional.” Criteria for 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.
What is leakage?
Leakage is the unintended loss or displacement of estimated net carbon sequestered. Leakage from forest carbon sequestration is an estimate of the amount of a program’s direct carbon benefits undermined by carbon releases elsewhere. Analytic, econometric, and sector-level optimization models are combined to estimate leakage from different forest carbon sequestration activities. Leakage can be a result of unexpected effects including unforeseen circumstances, improperly defined baseline, improperly defined project lifetime or project boundaries, and inappropriate project design.
What do you mean by permanence?
Offsets must be permanent so that carbon reductions are not invalidated by some unforeseen problem. Permanence refers to a period equal to the time emitted carbon remains in the atmosphere, in order to be equivalent with emissions reductions. A 50-100 year time horizon is frequently employed in calculating global warming potential in its greenhouse gas (GHG) inventory.