Emissions Reduction Purchase Agreement - ERPA

AAA

DEFINITION of 'Emissions Reduction Purchase Agreement - ERPA'

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 'Emissions Reduction Purchase Agreement - ERPA'

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 ...
  2. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  3. Carbon Trade

    An exchange of credits between nations designed to reduce emissions ...
  4. Trade

    A basic economic concept that involves multiple parties participating ...
  5. Carbon Credit

    A permit that allows the holder to emit one ton of carbon dioxide. ...
  6. Rights

    A security giving stockholders entitlement to purchase new shares ...
Related Articles
  1. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  2. Economics

    Globalization: Progress Or Profiteering?

    Proponents of globalization argue that it helps the economies of developing nations and makes goods cheaper, while critics say that globalization reduces domestic jobs and exploits foreign workers. ...
  3. Personal Finance

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  4. Investing

    What is the carbon trade?

    The carbon trade came about in response to the Kyoto Protocol. Signed in Kyoto, Japan, by some 180 countries in December 1997, the Kyoto Protocol calls for 38 industrialized countries to reduce ...
  5. Home & Auto

    5 Investment Risks Created By Global Warming

    Climate-change deniers and believers alike would be wise to prepare for the worst.
  6. Economics

    Save The Earth: Become A Capitalist

    Who says that capitalism and environmentalism have to be mutually exclusive?
  7. Investing News

    Impact Investing: Making A Difference And A Profit

    Most investors spend their time chasing returns. But what if there was a way to do good while also turning a profit?
  8. Investing News

    Emerging Markets' Environmental Commitment

    Most people think of the industrial and developed world as leaders when it comes to green technologies and environmental stewardship. After moving past their high-growth stages, many developed ...
  9. Economics

    The Uneven Consequences Of Corporate Misbehavior

    The system doesn't appear to be punishing misbehaving corporations as much as it should be.
  10. Personal Finance

    How New Fuel Efficiency Standards Will Affect Americans

    While stringent, the new fuel efficiency standards will mean more for the average American than just less trips to the pump.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center