Assembly Bill 32, or the California Global Warming Solutions Act of 2006, marked a historic moment in the state’s history by requiring a reduction of GHG emissions by the state. AB 32 requires California to reduce its GHG emissions to 1990 levels by 2020 and has resulted in the state’s cap-and-trade program. The program was extended through 2030 with the passage of AB 398.

Projects may only count emissions reductions that are "additional to what otherwise would have occurred in the absence of the certified project activity" (environmental additionality). These reductions must be "real" and "measurable" and must be quantified against a project baseline against which the additionality of the project can be measured and tested. Central to the discussion of additionality is that of what constitutes a project baseline.

Emission credits typically given by regulators to large facilities that "allow" those facilities to release a prescribed amount of pollutant. Surplus allowances may typically be sold, traded or banked for future use (depending on the compliance program in question).

One of the three main voluntary carbon registries in North America. Element Markets is one of the most active players on the American Carbon Registry for Emission Reduction Tonnes (ERTs) transacted and retired on behalf of a company or organization.

A market in which buyers enter competitive bids and sellers enter competitive offers simultaneously. Current auction markets in the US for Emission and Greenhouse Gas credits exist for California (AB32), Regional Greenhouse Gas Initiative (RGGI), and SO2 Acid Rain Allowances.

CARB is charged with protecting Californians from the harmful effects of air pollution and developing programs and actions to fight climate change. They oversee the implementation and rule making for AB32 and the LCFS program.

CCAs are issued via allocation or auction mechanism by the California Air Resources Board and may be obtained used by covered entities in meeting compliance obligations under AB 32.

CCOs are generated by project developers under eligible project types stipulated by the California Air Resources Board. CCOs may be used to meet a percentage of a covered entities’ AB 32 obligation. Element Markets specializes in portfolio optimization with the use of CCOs for covered entities under California cap-and-trade.

Passed in 1970, CEQA requires projects to disclose to the public any significant environmental effects through the preparation of an Initial Study (IS), Negative Declaration (ND), Mitigated Negative Declaration (NMD), or Environmental Impact Report (EIR). Element Markets is a leader in assisting project developers with off-site GHG mitigation in the form of carbon offsets. Carbon offsets may be used to achieve GHG mitigation below a threshold set by the project’s lead agency as well as achieve net zero emissions. The National Environmental Policy Act (NEPA) represents the federal parallel to CEQA.

Formerly known as the Carbon Disclosure Project, CDP is a not-for-profit organization focused on the global disclosure of environmental impacts by companies around the world. Element Markets assists companies with sustainability reporting goals under CDP through the provision of environmental commodities.

A product, service, or organization is carbon neutral when their actions result in no net release of CO2 to the atmosphere. Carbon neutrality is typically achieved via the use of carbon offsets and/or renewable natural gas.

A unit of Greenhouse Gas reductions that has been generated and certified under the provisions of Article 12 of the Kyoto Protocol, the Clean Development Mechanism (CDM). In contrast, Emissions Reduction Units (ERUs) are used for Joint Implementation (JI) under Article 6 of the Protocol. According to Article 12, CERs must be "certified by operational entities to be designated by the Conference of the Parties (COP) serving as the Meeting of the Parties (MOP)”.

One of the three main voluntary carbon registries in North America. Element Markets is one of the most active players on the Climate Action Reserve for Climate Reserve Tonnes (CRTs) transacted and retired on behalf of a company or organization.

CITSS is a management and tracking system for accounts and compliance instruments (CCAs or CCOs) issued through participating entities under AB 32.

A calendar year, beginning January 1 and ending December 31 of each year in which renewable energy credits are required of a competitive retailer. Different compliance programs have varying deadlines. Under AB 32, the deadline occurs annually on November 1st, with additional compliance obligations occurring after three years (triennial period).

A greenhouse gas reduction is a reduction in emissions that is recognized to contribute to climate change – e.g. carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Greenhouse gas reductions are often measured in tons of carbon dioxide-equivalent. For example, 1 ton of methane has the same global warming potential as 20.9 tons of carbon dioxide.

The place in the NOx or SO2 Allowance Tracking System where Allowances are recorded and held by a NOx affected source or an SO2 source.

DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT). DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT).

ERCs represent pollution that is no longer being emitted. They are certified reductions of VOCs, NOx, SO2, PM-10, ROGS or CO2 from facilities in non-attainment areas. A company that retained the right to emit a given quantity of a pollutant into the air, and voluntarily lowered or eliminated those emissions may apply to have those emissions ‘certified.’

A calculation used to determine price taking into account the quantity of allowances sold

The process of registering emission reduction credits with the proper regulatory agency. After credits are "banked", they can be saved for future use or sold to another company.

price at which a buyer and seller agree to transact a trade

A calendar year, beginning January 1 and ending December 31 of each year in which renewable energy credits are required of a competitive retailer.

any emissions and renewable energy credits, energy conservation credits, benefits, offsets and allowances, emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances under all applicable emission trading, compliance or budget programs, or any other federal, state or regional emission, renewable energy or energy conservation trading or budget program).

A price at which the stock or commodity underlying a call or put option can be purchased (call) or sold (put).

Fugitive emissions are intentional or unintentional releases of gases from anthropogenic activities such as the processing, transmission or transportation of gas or petroleum. In particular, they may arise from the production, processing, transmission, storage and use of fuels, and include emissions from combustion only where it does not support a productive activity (e.g., flaring of natural gases at oil and gas production facilities).

Co-benefits are the supplemental benefits derived from a carbon project. Certain co-benefits may be quantified (for example: number of employees added to the project area) or may be less measurable (for example: improved air and water quality from reforestation projects).