CO2me again: carbon market terms explained

The document defines essential carbon market terminology, including the distinction between cap-and-trade and compliance markets, the mechanics of carbon credits and budgets, and specific regulatory frameworks like the EU's CBAM and the ICAO's CORSIA.

• Cap-and-trade carbon markets, also known as emission trading systems, facilitate the trading of pollution permits called 'allowances', with each typically representing one tonne of emissions.
• The European Union's Carbon Border Adjustment Mechanism (CBAM), starting in 2026, will levy imports of electricity, hydrogen, fertilisers, aluminium, iron, steel, and cement based on their greenhouse gas content.
• Carbon leakage occurs when emissions reduction policies in one jurisdiction are nullified because polluting activities move to jurisdictions with less stringent rules, or when a project prevents deforestation in one area but accelerates it elsewhere.
• The Clean Development Mechanism (CDM) was an UNFCCC scheme established under the 1997 Kyoto Protocol to allow developed nations to buy carbon credits from emissions reductions in developing countries.
• CORSIA is a policy by the International Civil Aviation Organisation (ICAO) intended to offset the increase in CO2 emissions from international aviation to achieve 'carbon-neutral growth'.

APA

CMW (2025). CO2me again: carbon market terms explained. Carbon Market Watch. https://carbonmarketwatch.org/2025/10/09/co2me-again-carbon-market-terms-explained/

Chicago

CMW. CO2me again: carbon market terms explained. Carbon Market Watch, 2025. https://carbonmarketwatch.org/2025/10/09/co2me-again-carbon-market-terms-explained/.

Wikipedia

{{cite report |last1=CMW |title=CO2me again: carbon market terms explained |publisher=Carbon Market Watch |date=9 October 2025 |url=https://carbonmarketwatch.org/2025/10/09/co2me-again-carbon-market-terms-explained/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cmw2025co2me, author = {CMW}, title = {{CO2me again: carbon market terms explained}}, institution = {Carbon Market Watch}, year = {2025}, month = oct, url = {https://carbonmarketwatch.org/2025/10/09/co2me-again-carbon-market-terms-explained/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }