An emerging global market is developing for "verified emission reductions" (VERs), emission reductions that are created outside of the standardized procedures and methodologies for certified emission reductions (CERs) under the Clean Development Mechanism (CDM) of the Kyoto Protocol.
Some companies will be bound to reduce their greenhouse gas (GHG) emissions by commitments deriving from the Kyoto Protocol or mandatory emissions trading schemes, such as the EU ETS. Other companies, organizations and individuals, not necessarily bound by regulations, are nonetheless choosing to be leaders in the fight against climate change.
An emission reduction (ER) is a financial instrument that can be used to transfer GHG emissions reduction rights in the national and international marketplace to businesses and other entities that need them to "offset" (or create a "net" reduction of) their own emissions.
Sales of ERs occur because some companies or even individuals can reduce emissions more cheaply than others. Verification or certification of VERs is conducted by independent auditors who provide written assurance of the integrity of the ERC (similar to the role of a financial auditor).
A VER typically represents one ton of GHG emission reductions (avoided emissions) expressed in carbon dioxide equivalent units reduced-hence CO2 emission reductions, or VERs. VERs are usually traded in increments of tons.
EU ETS