Emissions Reduction Purchase Agreement - ERPA

A A A

DEFINITION

A transaction that transfers carbon credits between two parties under the Kyoto Protocol. The buyer pays the seller cash in exchange for carbon credits, thereby allowing the purchaser to emit more carbon dioxide into the atmosphere. The standards for this agreements are outlined by the International Emissions Trading Association.

INVESTOPEDIA EXPLAINS

This agreement usually involves two countries; however, it may occur between a country and a large corporation. Buyers expect their carbon emissions to be above the level allocated to them by the Kyoto Protocol, while the seller expects to produce less. Often, the seller has implemented new technology or is developing a new project that is expected to lower its greenhouse gas emissions.


RELATED TERMS
  1. Cap And Trade

    A regulatory system that is meant to reduce certain kinds of emissions and pollution ...
  2. Trade

    A basic economic concept that involves multiple parties participating in the ...
  3. Rights

    A security giving stockholders entitlement to purchase new shares issued by ...
  4. Carbon Trade

    An exchange of credits between nations designed to reduce emissions of carbon ...
  5. Green Economics

    A methodology of economics that supports the harmonious interaction between ...
  6. Carbon Credit

    A permit that allows the holder to emit one ton of carbon dioxide. Credits are ...
  7. Kyoto Protocol

    An international agreement that aims to reduce carbon dioxide emissions and ...
  8. Green collar

    A worker who is employed in an industry in the environmental sector of the economy, ...
  9. Water Pollution Liability

    Financial and legal responsibility for causing contamination to oceans, rivers, ...
  10. Water Quality Improvement Act Of ...

    Legislation that expanded the federal government's authority over water quality ...
Related Articles
  1. What Is International Trade?
    Personal Finance

    What Is International Trade?

  2. Globalization: Progress Or Profiteering?
    Economics

    Globalization: Progress Or Profiteering?

  3. Go Green With Socially Responsible Investing
    Personal Finance

    Go Green With Socially Responsible Investing

  4. What is the carbon trade?
    Investing

    What is the carbon trade?

  5. Impact Investing: Making A Difference ...
    Investing News

    Impact Investing: Making A Difference ...

  6. Emerging Markets' Environmental Commitment
    Investing News

    Emerging Markets' Environmental Commitment

  7. The Uneven Consequences Of Corporate ...
    Economics

    The Uneven Consequences Of Corporate ...

  8. How New Fuel Efficiency Standards Will ...
    Personal Finance

    How New Fuel Efficiency Standards Will ...

  9. 5 Ways To Reduce Your Carbon Footprint
    Personal Finance

    5 Ways To Reduce Your Carbon Footprint

  10. The Disposable Society: An Expensive ...
    Credit & Loans

    The Disposable Society: An Expensive ...

comments powered by Disqus
Hot Definitions
  1. Identity Fraud Reimbursement Program

    A financial product that offers reimbursment for the costs associated with having been a victim of identity theft. These costs may include getting affidavits notarized for police and financial institutions, postage for sending certified mail to police and financial institutions, lost earnings resulting from time spent recovering one's identity, and legal fees.
  2. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  3. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  4. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  5. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  6. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
Trading Center