A certified emissions reduction (CER) is a unit of greenhouse gas (GHG) emissions reduced by sources or removed by sinks and achieved under a clean development mechanism (CDM) project. Under the CDM, developed countries can invest in or finance projects in developing countries. These projects must result in a reduction of emission or removal of GHGs from the atmosphere additional to any that would have occurred in the absence of the projects. The difference between the emissions that would have been released without the project (referred to as the baseline emissions) and what was actually released is validated and certified by an independent body and confirmation is issued by the CDM Executive Boards as a CER. Developed countries that have quantified emission limitation and reduction commitments (QELRCs) under the Kyoto Protocol can use CERs to contribute to meeting their targets. These QELRCs are set out in Annex B of the protocol, and developed countries are allowed to use CERs to achieve part, but not all, of their commitments. CERs are also known as carbon credits.

A CER represents 1 metric ton of carbon dioxide equivalent (CO2e) GHG emissions, either removed from the atmosphere or prevented from being released into the atmosphere. The amount of CERs issued for 1 metric ton of GHG reduction or removal depends on the type of gas and its global warming potential (GWP). The GWP of a gas refers to an estimation of its contribution to climate change or the effect it has on the climate. All gases are defined relative to carbon dioxide (CO2), whose GWP is 1, so for 1 metric ton of CO2 reduced or removed, one CER or carbon credit can be issued. The GWP of other gases may vary depending on the time horizon over which the impact of the gas is being determined--for most gases, the impact reduces as the time horizon increases. The GWP of methane, for example, ranges from 56 for a time horizon of 20 years, to 21 for 100 years, to 6.5 for 500 years. This means that for 1 metric ton of methane reduced or removed from the atmosphere, 56, 21, or 6.5 CERs can be generated, depending on the relevant time horizon.

As of October, 2008, about 227 million metric tons of CERs were being generated annually from registered CDM projects. The total CERs from all roughly 1,184 registered CDM projects are expected to amount to about 1.3 billion metric tons by the end of 2012. By the end of 2012, it is expected that the CDM will have generated approximately 3 billion metric tons of CERs. This represents 3 billion metric tons of CO2e removed or reduced from the atmosphere. The purpose of the CDM includes assisting developing countries in their efforts to stabilize the amount of GHGs in the atmosphere at a safe level and assisting developed countries to meet their commitments to reduce their GHG emissions. The aim of the CDM therefore is to support the mitigation of climate change.

The quantity of CERs generated from CDM projects represents how successful the CDM has been in achieving this goal. In particular, the CER system is the only streamlined means for developing countries to participate in the CDM, because under the Kyoto Protocol, developing countries have no set emission-reduction targets. Since all CERs are generated from projects implemented in developing countries, they represent emission reductions achieved in developing countries, in addition to those achieved in developed countries. In addition, the CDM is expected to assist developing countries in achieving sustainable development, helping them move to a more climate-friendly development path.

CERs can also be traded on the carbon market. Some developed country entities invest in CDM projects in order to use the CERs generated to meet their reduction targets under the Kyoto Protocol. Other entities invest in projects in order to obtain CERs from the projects and sell them on the carbon market. In addition, developing-country entities also finance or invest in projects and trade the CERs generated from them in the carbon market. Trade in CERs has helped create a market for trade in carbon, thereby increasing the number of entities, especially private entities, interested in carbon credits, and potentially in efforts to reduce GHG emissions.

The issuance of CERs could also potentially have a negative impact on climate change. Developed countries with reduction targets can use CERs to meet these targets. If the emission reductions generated by a CDM project are overestimated and too many CERs issued for the project, this would result in no decrease, or even a net increase, in GHG emissions, as these CERs would count toward developed country targets, and these countries could in fact theoretically increase their emissions by this amount.

References:

1)         Ali, Paul A. U., and Kanako Yano. Eco-Finance: The Legal Design and Regulation of Market-Based Environmental Instruments. New York: Kluwer Law International, 2004.

2)         Lecocq, Franck. State and Trends of the Carbon Market, 2004. Washington, D.C.: International Bank for Reconstruction and Development/World Bank, 2005.

3)         Yamin, Farhana, ed. Climate Change and Carbon Markets: A Handbook of Emissions Reductions Mechanisms. London: Earthscan, 2005.

Free term papers are not written to satisfy your specific instructions. You can use our professional writing services to buy a custom written research paper, term paper, or essay on Global Warming at affordable price. CustomTermPapers is the best solution for those who seek help in writing term papers, essays, and research papers related to Global Warming and other relevant topics.