Reduction of greenhouse gas emissions, or removal of greenhouse gas from
the atmosphere by sinks.
The chemical or physical transformation of inputs to a given set of
Planting of new forests on lands not recently forested. Under the Kyoto
Protocol, afforestation is defined as the direct human-induced conversion to
forested land of land that has not contained a forest for at least 50 years.
Distribution of permits.
A method of allocating units in which government releases units into the
market through an auction process.
A charcoal product made through anaerobic combustion of biomass (for example,
farm or wood waste) at high temperatures.
Cap and trade
An emissions trading regime in which a limit (or cap) is placed on the total
emissions allowable from the activities or sources of emissions covered under
the scheme. Tradeable emissions units are issued up to an amount equal to the
Carbon capture and
Technology to capture and store greenhouse gas emissions from energy
production or industrial processes. Captured greenhouse gases have the
potential to be stored in a variety of geological or ocean sites.
Carbon dioxide (CO2)
A naturally occurring gas; it is also a by-product of burning fossil fuels
and biomass, as well as land-use changes and other industrial processes.
A standard measure that takes account of the different global warming
potential of different greenhouse gases and expresses the cumulative effect in
a common unit.
The effect when a firm facing increased costs in one country due to an
emissions price chooses to reduce, close or relocate production or to close or
relocate production to a country with less stringent climate change policies.
Carbon price/ carbon
The cost of emitting carbon into the atmosphere.
A flexibility mechanism under the Kyoto Protocol that allows developed
countries to meet part of their obligation to reduce emissions by undertaking
approved emissions reduction projects in developing countries. Emissions
reductions under the CDM can create tradable permits offset credits, called
certified emission reductions or CERs.
The simultaneous production of electricity and heat using a single fuel,
such as natural gas. The heat produced from the electricity generating process
is captured and utilised to produce steam.
The scope of an emissions trading scheme. Sources of emissions covered
under the scheme are liable for their emissions.
The release of greenhouse gases into the atmosphere.
Emissions intensive industries
Industries that produce significant emissions during their production
processes and are therefore assessed to have an emissions intensity above a
A market-based approach to reducing emissions that allows entities with
excess emissions units to trade those emissions units with other entities. In
general, trading can occur at the domestic, international and intra-company
levels. International emissions trading constitutes one of the Kyoto
Greenhouse gases that are released in the course of oil and gas extraction
and processing, through leaks from gas pipelines, and as waste methane from
black coal mining.
G Cubed model
A computable general equilibrium model of the global economy developed by Professor
Warwick McKibbin and Associate Professor Peter Wilcoxen. The model’s design
makes it especially useful for analysing international environmental and trade
Greenhouse gas (GHG)
Any gas that absorbs infrared radiation in the atmosphere. This property
causes the greenhouse effect. The term ‘greenhouse gases’ in this report
relates to those gases covered by the Kyoto Protocol, which are carbon dioxide,
nitrous oxide, methane, sulphur hexafluoride, perfluorocarbons (PFCs) and
Technology which produces a product with minimal greenhouse gas emissions.
A reduction in the source of, or enhancement of the sinks for, greenhouse
Wholesale market for the supply of electricity to retailers and end-users
in the interconnected regions of Queensland, New South Wales, the Australian
Capital Territory, Victoria and South Australia. The NEM does not include
Western Australia. It began operating in December 1998. Tasmania joined in
A certificate created under an emissions trading scheme that enables the
holder to emit a specified amount of greenhouse gases, generally one tonne of
carbon dioxide equivalent.
A national Renewable Energy Target scheme places a legal obligation on
parties who buy wholesale electricity (retailers and large users) to source a
certain percentage of their electricity purchases from renewables based
generation. The annual targets are legislated in gigawatt-hours of electricity.
Liable parties can demonstrate compliance with the scheme by acquiring and
surrendering to the scheme regulator tradeable renewable energy certificates
created by accredited renewable energy generators.
Includes emissions from fuel consumption for electricity generation, fuels
consumed in the manufacturing, construction and commercial sectors, and other
sources such as domestic heating.
Industries which export or compete against imports and have their product
prices set by world markets. These industries are therefore constrained in
their ability to pass through carbon costs due to actual or potential
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