One of the steps that must be taken before a project can generate emissions reductions credits through the CDM. A designated operational entity must make an assessment of the project’s Project Design Document, which describes its emissions reduction goals. Validation entails confirming that the parties are voluntarily participating, stakeholders are aware, documentation on environmental impact has been submitted, the project is additional, and that the methodology and provisions for monitoring, verification, and reporting are consistent with CDM rules. The DOE must then issue a validation report and request that the CDM Executive Board register the project.
Verified Emission Reductions (VERs)
A unit of greenhouse gas emission reductions that has been verified by an independent auditor, but that has not yet undergone the procedures and may not yet have met the requirements for verification, certification and issuance of CERs (in the case of the CDM) or ERUs (in the case of JI) under the Kyoto Protocol. Buyers of VERs assume all carbon-specific policy and regulatory risks (i.e. the risk that the VERs are not ultimately registered as CERs or ERUs). Buyers therefore tend to pay a discounted price for VERs, which takes the inherent regulatory risks into account. VERs are carbon credits which are not certified under the Kyoto Protocol but which can be used to compensate carbon emissions. 1 VER corresponds to one metric tone of CO2 equivalent.
Voluntary markets for emissions reductions cover those buyers and sellers of Verified Emission Reductions (VERs), which seek to manage their emission exposure for non-regulatory purposes.