FINANCE AND CARBON MARKETS LEXICON January 2012

The lexicon was developed by the Forest Carbon, Markets and Communities (FCMC) Program and Tetra Tech ARD for the United States Agency for International Development (USAID)

USAID is leading the United States Government’s implementation of its Strategic Choices for United States Fast Start Financing for REDD+. To pursue this strategy efficiently requires effective communication between government agencies and public and private sector institutions based on mutual understanding of vocabulary, acronyms, definitions, and vocabulary categories.

The role of this Finance and Carbon Markets Lexicon is to provide a tool that encourages effective communication between government agencies and public and private sector institutions. To do this, this lexicon contains a list of relevant vocabulary, definitions, reference sources, and acronyms organized around vocabulary categories as applied by the public- and private-sector REDD+ industry globally.

The categories around which the lexicon is organized provide a framework for understanding the relevance of each term to finance and carbon markets. The vocabulary categories are broken into two broader themes of financial vocabulary and carbon accounting vocabulary. There are four financial vocabulary categories that are based on international finance best practices. These categories are:

• Risk Management;
• Valuation;
• Regulatory and Accounting; and
• Performance.

There are seven agriculture, forestry and land-use categories based on carbon accounting international best practices. These categories are:

• Afforestation, Reforestation and Revegetation Methodology;
• Agriculture Land Management Methodology;
• Avoided Conversion of Grasslands and Shrublands Methodology;
• Carbon Pools;
• General Carbon Accounting Methodology;
• Improved Forest Management Methodology;
• Peat Rewetting and Conservation Methodology; and
• Reducing Emissions from Deforestation and Degradation Methodology.

ACRONYMS AND ABBREVIATIONS

AAU		Assigned Amount Unit
ACoGS		Avoided Conversion of Grasslands and Shrublands
ACR		American Carbon Registry (link)
AFOLU		Agriculture, Forestry and Other Land Use
ALM		Agricultural Land Management
ANR		Assisted or Accelerated Natural Regeneration
APC		Avoiding Planned Conversion
APD		Avoided Planned Deforestation
ARR		Afforestation, Reforestation and Revegetation
AUC		Avoiding Unplanned Conversion
AUDD		Avoiding Unplanned Deforestation and/or Degradation
AUM		Assets Under Management
AUMDD		Avoiding Unplanned Mosaic Deforestation and Degradation
BAU		Business-as-Usual
BECCS		Bioenergy with Carbon Capture and Storage
CAR		Climate Action Reserve (link)
CCB		Climate, Community, Biodiversity Standards (link)
CCX		Chicago Climate Exchange (link)
CDM		Clean Development Mechanism (link)
CDS		Credit Default Swap
CER		Certified Emission Reduction
CFAI		CFA Institute (link)
CGLC		Cropland and Grassland Land-use Conversions
CO2		Carbon Dioxide
CO2e		Carbon Dioxide Equivalent
CRT		Climate Reserve Tonnes
CUPP		Conservation of Undrained or Partially Drained Peatland
D&O		Directors and Officers Insurance
DNA		Designated National Authority
DNS		Debt-for-Nature-Swap (link)
E&O		Errors and Omissions Insurance
ER		Emission Reductions
ERA		Extended Rotation Age / Cutting Cycle
ERM		Enterprise Risk Management
ERPA		Emission Reduction Purchase Agreement
ERU		Emission Reduction Unit
ESG		Environmental, Social, Governance Risk
FASB		Financial Accounting Standards Board, (link)
FCMC		Forest Carbon, Markets, and Communities Program
GHG		Greenhouse Gases
GIPS®		Global Investment Performance Standards (link)
GWP		Global Warming Potential
ICM		Improved Cropland Management
IFM		Improved Forest Management
IGM		Improved Grassland Management
IPCC		Intergovernmental Panel on Climate Change (link)
IPS		Investment Policy Statement
IRR		Internal Rate of Return
ISO		International Organization for Standardization
JI		Joint Implementation (link)
JNRI		Jurisdictional nested REDD+ Initiative
LtHP		Low-Productive to High-Productive Forest
LtPF		Logged to Protected Forest
LULUCF		Land Use, Land-Use Change and Forestry
MP		Monitoring Plan
MRV		Measurement, Reporting and Verification
NAMA		Nationally Appropriate Mitigation Actions
NTFP		Non-Timber Forest Products
OE		Operational Entity
PD		Project Document
PDD		Project Design Document
PES		Payment for Ecosystem Service
PFSI		New Zealand Permanent Forest Sink Initiative (link)
PIN		Project Information Note
PIU		Pending Issuance Unit
PLI		Professional Liability Insurance
POA		Program of Activities
PRC		Peatland Rewetting and Conservation
RDP		Rewetting of Drained Peatland
REDD		Reducing Emissions from Deforestation and Degradation
RIL		Reduced Impact Logging
R-PP		Readiness Preparation Proposal (link)
SAF		Society of American Foresters (link)
SFM		Sustainable Forest Management
SRI		Socially Responsible Investing
USAID		United States Agency for International Development (link)
VCS		Verified Carbon Standard (link)
VCU		Verified Carbon Unit
VERPA		Voluntary Emission Reduction Purchase Agreement