Carbon Markets & Offsetting
Certified emission reduction (CER)
The tradable credit issued under the Kyoto Protocol's Clean Development Mechanism, each representing one tonne of CO₂-equivalent reduced by a registered project in a developing country.
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A carbon credit issued by the Clean Development Mechanism (CDM) Executive Board under Article 12 of the Kyoto Protocol, equal to one tonne of CO₂-equivalent emission reductions from a registered CDM project in a developing country, measured against an approved baseline, verified by accredited auditors and certified by the Board. CERs could be used by industrialised countries toward Kyoto targets.
References
CDM under Kyoto Art. 12; CER = 1 tCO₂e; project counts and anticipated issuance; Executive Board oversight.
Baseline methodology; validation/certification chain; 2% Adaptation Fund levy; CER tradability.
Overview
What it means
CERs were the first global-scale carbon credits — over 1,650 projects were registered, with more than 2. 9 billion tonnes anticipated for the 2008–2012 commitment period — and a 2% levy on proceeds funded the Adaptation Fund.
The mechanism pioneered today's offsetting architecture (methodologies, validation/verification, registries) and its controversies: studies found a substantial share of issued CERs had questionable additionality, particularly industrial-gas projects, and EU ETS demand collapsed after 2012, crashing prices. CDM credits' legacy continues under the Paris Agreement: Article 6.
4 (the Paris Agreement Crediting Mechanism) is the CDM's successor, and transitions of eligible CDM activities and CERs were negotiated at COP26 and after.
How it is used
CERs historically supplied compliance and voluntary offsetting (EU ETS, CORSIA eligibility windows); residual units trade at deep discounts; the CDM's methodological apparatus informs Article 6. 4 and ICVCM assessment of legacy credits.
Why it matters
The CER era is the carbon market's founding experiment — its scale proved offsetting could mobilise billions, and its integrity failures defined the safeguards every successor mechanism now claims to fix.
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