Carbon Projects

Carbon projects are business ventures that are undertaken in order to reduce emissions.  They may be directly funded by polluters as compensation for GHG-producing activities or their results may be commoditized and sold as offsets.  Examples include conversions to renewable energy or energy efficiency upgrades.   Projects must be additional in order to be validated and become monetized. Carbon projects help funding to be directed towards environmentally beneficial and sustainable development . The Clean Development Mechanism , a Kyoto flexible mechanism, is the essential example of the use of carbon projects in an emissions reduction scheme.

Project-based emission reductions are sold both under Kyoto and in voluntary markets. Under Kyoto, project activity in specified sectors and parts of the world through JI or CDM projects is an alternative to international emissions trading or transfer of assigned amount units. Emissions reductions sold as carbon offsets in voluntary markets are also project-based. Common carbon offset project types under the CDM and in American voluntary markets include industrial gas projects , methane capture , renewable energy , carbon capture and storage, no-till farming, energy efficiency , fuel switching, and biological sequestration projects, including forestry/LULUCF.  See the article on voluntary markets for an overview of the role that different project types play in these carbon markets.