Over the next few decades, the carbon financial sector is projected to grow into a multi-trillion dollar market. Before this potential can be realized, the nature of the commodity, GHG emission abatement and sequestration, demand the development of sound and rigorous science-based protocols for measuring and monitoring carbon sources and sinks. National and international policy frameworks have followed a general trend in engaging market mechanisms, through cap-and-trade systems, to help achieve efficiencies in meeting GHG emission targets. The cap-and-trade approach allows GHG-emitting entities to achieve a portion of their emission compliance through the purchase of reductions achieved by others. As a result, carbon (or GHG CO2 equivalents—CO2e) has become an internationally traded commodity, as currency of the new carbon financial markets. Underpinning the ability to trade in carbon is the quantitative understanding of carbon cycle science that governs the targeted sources and sinks. The domain of carbon measurement spans industrial, energy, and land use components of the global carbon cycle. Protocols have been developed and are being refined that cover a range of carbon source and sink mechanisms, from the capture of methane from landfills to the sequestration of carbon in agricultural and land use systems. Using these protocols, the associated trading platforms in North America and Europe have supported the trade in hundreds of millions of dollars in emission reductions and offsets. The further development and expansion of the policy and measurement frameworks needed to support growth of the carbon financial markets will challenge the next generation of science programs.
Was this article helpful?