The Kyoto Protocol is the first collective response to climate change. It includes instruments which allow governments in industrialised countries to achieve parts of their emission reduction commitments through projects abroad rather than through action or policy changes at home.
Countries with commitments under the Kyoto Protocol to limit or reduce greenhouse gas emissions must meet their targets primarily through national measures. As an additional means of meeting these targets, the Kyoto Protocol introduced three market-based mechanisms, thereby creating what is now known as the carbon market.
The emission trading-mechanism allows industrialised countries to buy and sell greenhouse gases emission credits to and from other countries to help meet their domestic reduction targets.
Countries that keep emissions below their agreed target will be able to sell the excess emissions to countries that find it more difficult or more expensive to meet their own targets.
Joint implementation under the Kyoto Protocol allows industrialised countries (Annex B countries) to meet part of their required cuts in greenhouse-gas emissions by paying for projects that reduce emissions in other Annex B countries.
Clean development mechanism allows Annex B countries to meet part of their required cuts in greenhouse-gas emissions by investing in projects that reduce emissions in non Annex B countries.
Under the Kyoto Protocol, the European Union is committed to reducing its greenhouse gas (GHG) emissions.
In 2005, the EU developed the European Union emissions trading scheme to reduce the cost of pollution by providing economic incentives for achieving emissions reductions.
Under this scheme, each participating country has drawn a National Allocation Plan (NAP) setting yearly CO2 emissions quotas for industrial installations across the EU Member States. These quotas are materialized by allocations of "European Emission Allowances" (EUAs). One EUA represents the right to emit 1 ton of CO2.
In such a plan, a central authority sets limits or "caps" on each country and each pollutant. Countries or pollutants that exceed their limits may buy emissions credits from entities that are able to stay below their designated limits. This transfer is referred to as a trade.
To comply with their obligations, capped companies may either
The voluntary carbon market, or carbon offset market, has evolved in parallel to the compliance market. In this market there are no caps or legal binding responsibilities to fulfil as there are in the compliance market.
It usually involves buyers such as companies, individuals or organisations seeking to offset emissions for ethical reasons or branding and public relations.
Each of our everyday actions consumes energy and produces carbon dioxide emissions e.g. events, flights, driving, heating or cooling offices. Carbon offsets can be used to compensate for the emissions produced by funding an equivalent carbon dioxide saving elsewhere.
Customers in the voluntary carbon market are able to purchase both credits which originate from the Kyoto compliance market (CER and ER units) and credits which originate from the voluntary market (VER).
A voluntary emission reduction is a certificate rewarded to projects worldwide that reduce CO2 emissions. These VERs are used by organisations that voluntarily neutralise their carbon footprint. One VER is the equivalent to 1 ton CO2 reduced.
Nvalue helps you structure a custom made portfolio of VERs which represents your core values, as well as finding primary projects that either reduce emissions directly or boost the reduction of emissions indirectly.
Standards of VERs we trade: