CCP CCP Carbon Markets & Offset Credits 1

Question 1

What is a carbon credit, as traded in voluntary and compliance carbon markets?

Accepted Answer

A certificate representing one metric ton of CO2 equivalent reduced or removed from the atmosphere

Answer

A carbon credit represents one metric ton of CO2 equivalent (CO2e) that has been reduced, avoided, or removed from the atmosphere, and can be bought and sold in carbon markets.

Question 2

Under the U.S. Regional Greenhouse Gas Initiative (RGGI), which sector is primarily regulated?

Accepted Answer

Electric power generation

Answer

RGGI is a cap-and-trade program covering CO2 emissions from fossil fuel–fired electric power plants with a capacity of 25 MW or more across participating northeastern states.

Question 3

What distinguishes a 'compliance' carbon market from a 'voluntary' carbon market?

Accepted Answer

Compliance markets are legally mandated by regulation, while voluntary markets allow companies to purchase offsets by choice

Answer

Compliance carbon markets are established by law or regulation (such as cap-and-trade programs), obligating covered entities to participate, whereas voluntary markets are used by organizations choosing to offset emissions beyond legal requirements.

Question 4

Which international framework governs the trading of carbon credits between countries under the Paris Agreement?

Accepted Answer

Article 6 of the Paris Agreement

Answer

Article 6 of the Paris Agreement establishes the rules for international carbon market cooperation, including bilateral trading (Article 6.2) and the new centralized crediting mechanism (Article 6.4).

Question 5

What is 'additionality' as it applies to carbon offset projects?

Accepted Answer

The requirement that emission reductions would not have occurred without the carbon finance incentive

Answer

Additionality requires that greenhouse gas reductions attributable to an offset project would not have happened under a 'business as usual' scenario without the revenue from carbon credit sales.

(CCP) Certified Climate Change Professional Practice Test

(CCP) Certified Climate Change Professional Practice Test

CCP CCP Carbon Markets & Offset Credits 1