FAQs about Carbon Markets

3. How are reductions in greenhouse gas emissions measured?

The units of GHG emission reductions are measured in tons of CO2 equivalent. They are expressed in carbon credits or Certified Emission Reductions (CERs).

A CER equals one ton of carbon dioxide (CO2) that is no longer emitted into the atmosphere. CERs can be sold in the carbon market to industries, countries or other entities, in order to obtain resources to create clean or renewable energy projects, such as wind farm construction, solar panel manufacturing or installation, forest reforestation, cleaning of coasts, lakes and rivers.

The equivalent CO2 unit is a kind of common denominator that was devised to facilitate the calculation of the total emitted greenhouse gases. Each gas generates a different greenhouse effect, inherent to its own chemical characteristics, but since carbon dioxide is the one with the highest volume in the atmosphere, it has been taken as the basis for calculating the total greenhouse effect, called the equivalent CO2 unit.

Greenhouse gases such as methane, nitrous oxide, hydrofluorocarbons and others are converted to their equivalent value in carbon dioxide. For example, methane has a 23 times more potent effect than CO2, but its presence in the atmosphere is 220 lowers. Both figures are considered to calculate their CO2 equivalent effect.

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