Climate change has big impacts on the economy and industry because we need to reduce emissions. But not all emissions from making things or running things can be stopped right away by using cleaner ways. When it’s really hard to stop these emissions, there’s a thing called voluntary emission reductions, or Verified Emission Reductions (VERs). These are like voluntary offsets for emissions in difficult cases.
VERs are different from when big industries and energy companies have to trade emission allowances. Those are like official certificates allowing them to release a certain amount of carbon dioxide. VERs are for when people want to voluntarily offset emissions and trade them in the open market.
How are Verified Emission Reduction Certificates Issued?
Verified Emission Reduction (VER) certificates are issued based on the principle of compensation, allowing companies to offset their greenhouse gas emissions by supporting climate protection projects. Each project, such as reforestation in South America, earns one VER certificate for every tonne of CO2 it can compensate. These certificates’ proceeds fund the respective climate projects.
To ensure credibility, projects and their emission reductions undergo rigorous verification by neutral auditors, adhering to recognized standards. These VER certificates are traded on international financial markets through entities. Pricing depends on factors like project size, resources, and local infrastructure. Projects with higher potential benefits or influence command greater demand, affecting prices.
Each VER certificate receives a unique serial number, registration, and validation. Additionally, VER certificates adhere to the additionality principle, confirming that emissions wouldn’t have been reduced without the project. The revenues from certificate sales further support climate protection initiatives, contributing to their overall goals.
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