Skip to main content.

Key terms

Explanation of key terms used in the Projects to Reduce Emissions tender.

Abatement

The reduction of greenhouse gas emissions.

Additionality

Additionality relates to the need for a project proposal to be additional to "business-as-usual", answering such questions as: "Would the proposal have proceeded without the Projects incentive?"

Additionality relates to both investment and environmental measures:

  • Investment additionality criteria are used to determine that the proposal is additional to "business-as-usual".
  • Environmental additionality criteria are used to determine that the project will achieve measurable emission reductions beyond "business-as-usual".

Assigned amount

The assigned amount is the emission allowance assigned under the Kyoto Protocol for the man-made emissions of greenhouse gases that an industrialised country (Annex 1 Party) is permitted to emit over a certain commitment period.

Assigned amount unit (AAU)

This represents a unit issued out of a country's initial assigned amount and designated as an assigned amount unit (or AAU), expressed as a tonne of CO2-equivalent, by

  • the Registry; or
  • an overseas registry of a country listed in Annex B of the Kyoto Protocol.

Baseline emissions

The baseline for a project is the scenario that reasonably represents the emission of greenhouse gases that would occur without the intended project activity or policy intervention. It therefore represents the emissions associated with a "business-as-usual" scenario. The baseline should include emissions from all greenhouse gases within the project boundary. The additional emission reductions that a project contributes can only be determined once the baseline has been calculated or assessed. Various approaches can be taken to determine the baseline, but the approach must be justified as part of the project validation process.

Business-as-usual

If a proposal is for a project that would have proceeded without the Projects incentive, then it meets the criteria of "business-as-usual" and is not eligible for the Projects tender.

Carbon dioxide-equivalent (CO2-e)

The basis for comparing the warming effect of a greenhouse gas as compared to carbon dioxide. It is calculated by multiplying the mass of a greenhouse gas by its global warming potential.

Certified emission reduction unit (CER)

This represents a unit derived from a Clean Development Mechanism project, issued by the CDM registry, and designated as a certified emission reduction unit (or CER) by the CDM registry.

Commitment period A period within which parties to the Kyoto Protocol are required to meet their greenhouse gas emissions reduction target, which is averaged over the years of the commitment period. The first commitment period (CP1) covers the five years, 2008 - 2012. The period between now and 2008 is called the pre-commitment period.

Clean Development Mechanism

Article 12 of the Kyoto Protocol defines the Clean Development Mechanism. It is a project-based mechanism between Annex 1 and non-Annex 1 countries whereby the project is implemented in the non-Annex 1 country.

Embodied emission factors

Embodied emission factors are the factors applied to common construction materials to convert them to CO2-equivalent.

Emission factors

Emission factors are the factors applied to electricity and fossil fuels to convert them to CO2-equivalent.

Emission reduction unit (ERU)

This represents a unit derived from a Joint Implementation project (see below), issued by converting an assigned amount unit or removal unit, and designated as an emission reduction unit (or ERU) by:

  • the Registry; or
  • an overseas registry of a country listed in Annex B of the Kyoto Protocol.

Emission units

Means all of the unit types specified in the Kyoto Protocol, namely, assigned amount units (AAUs), certified emission reduction units (CERs), emission reduction units (ERUs), and removal units (RMUs). For the purposes of the Projects to Reduce Emissions programme and the Model Project Agreement, the emission units being offered by the Crown are AAUs (or ERUs if these are requested by the project participant).

Global warming

The rise in temperature caused by rising greenhouse gas concentrations in the atmosphere.

Global Warming Potential (GWP)

The GWP Index measures the effect caused by the release of a greenhouse gas into the atmosphere. The index compares the ability of each greenhouse gas to trap heat in the atmosphere relative to another gas. Carbon dioxide (CO2) is the reference point.

Greenhouse gas emissions inventory

New Zealand's greenhouse gas emissions inventory, reports New Zealand's emissions of the six Kyoto Protocol greenhouse gases. These emissions are as reported annually by the Ministry for the Environment.

Greenhouse gases

Greenhouse gases trap some of the heat that the earth radiates back into space. This is referred to as "global warming" or the "greenhouse effect", hence the term, "greenhouse gas". The greater the concentration of greenhouse gases in the atmosphere, the greater the projected temperature rise and associated climate change. The greenhouse gases included in the Kyoto Protocol are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and a group of synthetic gases - hydrofluorocarbons (HFCs), sulphur hexafluoride (SF6) and perfluorocarbons (PFCs).

Joint Implementation

This is a mechanism established under Article 6 of the Kyoto Protocol. Joint Implementation allows for the acquisition and transfer of emission reduction units (ERUs) linked to projects between two Annex 1 countries.

Kyoto Protocol

The international agreement under the United Nations Framework Convention on Climate Change (UNFCCC) that legally binds developed countries listed in its Annex B to targets to reduce greenhouse gas emissions. The Kyoto Protocol provides for three mechanisms to facilitate the reduction of greenhouse gas emissions:

  • Joint Implementation - Emission reductions that arise from project investments in developed countries (Annex 1 countries).
  • Clean Development Mechanism - Emission reductions arising from project investments in developing countries (non-Annex 1 countries).
  • International emissions trading - Portions of an Annex 1 country's emission allowances can be bought and sold on an international carbon trading market.

Leakage

Leakage is the indirect effect of emission reduction policies or activities that lead to a rise in emissions elsewhere (for example, fossil fuel substitution leads to a decline in fuel prices, resulting in a rise in fuel use elsewhere).

Project boundary

The project boundary encompasses all emissions by sources of greenhouse gases under the control of the PRE project participant that are material and reasonably attributable to the project.

When defining the project boundary, both direct and indirect emissions should be included in the project inventory.

  • Direct emissions are those from sources that are owned or under the control of the project participant.
  • Indirect emissions associated with electricity purchased may be significant in a number of cases and are included using a standard emission factor.
  • Other indirect emissions, which are a consequence of the project participant's activities but from sources owned or under the control of others, should be included, if material.

Indirect emissions should be included within a project boundary only if they are clearly material to the project, and capable of being monitored and reported by the project participant through the project life.

Removal unit (RMU)

This represents a unit:

  • derived from a country's sink activities that result in a net removal of greenhouse gases; and
  • designated as a removal unit (or RMU) by
    • the Registry; or
    • an overseas registry of a country listed in Annex B of the Kyoto Protocol.

Sequestration

The removal of greenhouse gases from the atmosphere by photosynthesis or technological measures through storage in a sink. Storage may involve containing the gas physically without changing its chemical form, or else, more commonly, fixing the gas with a different material through a chemical or biophysical process.

Sink

Any natural or man-made system that absorbs and stores greenhouse gases, including carbon dioxide, from the atmosphere. To be considered a sink, a system must be absorbing more carbon dioxide than it is releasing, so that the permanent store of carbon is expanding. Note: Forest sink activities are not eligible for Projects.

Last updated: 20 March 2008