Certified Emission Reductions (CERs) are carbon credits generated by Clean Development Mechanism projects. They have passed the UNFCCC’s registration process and have been monitored, verified and have been subsequently issued. The Clean Development Mechanism is the mechanism through which developing countries choose to employ technologies or processes which reduce their carbon emissions to a greater extent than they would have done employing their conventional technologies. Consequently, the projects generate emission credits through reductions in CO2 output relative to a calculated baseline.
Examples of such projects are as follows:
Wind, solar, incineration of industrial chemical waste streams such as HFC23 and N2O, fuel switching, industrial methane reduction activities such as landfill and agricultural methane capture including animal waste management, energy efficiency, hydroelectric, afforestation, reforestation and electricity generation from agriculture and waste.
One key concept of CERs is as follows:
The CER must be generated from a CDM project that "reduces emissions that are additional to any that would occur in the absence of the certified project activity".
There are currently, however, limits to the percentage of CERs that can be utilised by Annex 1 companies in their efforts to neutralise their carbon emissions. Only between 10% and 20% of a company’s overall emissions can be offset through the use of CDM credits.
The CDM is not only popular with developed countries keen to purchase emission credits under the price of existing EUAs, but has also been very popular with developing nations keen to accelerate their development and adopt clean technology used by the developed world. In fact, this was the objective of the CDM, whose dual mandate is to reduce emissions for industrialised countries and accelerate the sustainable development of developing nations.
