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Emission Reduction Purchase Agreements

The emissions reduction contract between the buyer and seller of emission credits is an important document for developers of climate change projects. It identifies responsibilities, rights and obligations for project risk management. It also defines the commercial conditions of the project, including the price, volume and delivery plan for emission reductions. An ERPA usually involves two countries. However, it can also occur between a country and a large company. Often, the seller has implemented new technologies or developed a new project that he expects him to reduce his greenhouse gas emissions, so that the seller does not need as many emission credits and can benefit from them by selling. The Kyoto Protocol, signed in 1997 in Kyoto, Japan, by 192 industrialized countries, comes closest to a global agreement that works to combat climate change. Countries that ratify the Kyoto Protocol are given a CAP on CO2 emissions. If more than the assigned limit is issued, the injuring country is subject to a penalty in the form of a lower emission limit for the following period. However, if a country wishes to emit more greenhouse gases than its allowable limit (without penalty), it can participate in the emissions trading scheme with an ERPA.

. In accordance with the methodological framework, the seller (e.g. B a REDD+ country) should identify in the ERPD certain carbon-free benefits that the RE programme should achieve when implementing the RE programme. It is also expected that the seller will identify in the ERPD certain non-carbon benefits that are considered a “priority”. Therefore, carbon-free benefits play an important role in the FCPF Carbon Fund`s assessment of the quality of each ER program and in its final decision whether or not to include an ER program in its portfolio of ER programs. Under the GCC, the seller is encouraged to generate and/or enhance non-carbon “priority” benefits and, as part of each follow-up and interim report, should provide information on its efforts to generate and/or enhance these non-carbon “priority” benefits. However, the GTC remain silent on the price that the buyer must pay for all generated, verified and transferred emergencies that have been contractually agreed within the framework of the ERPA. As a business concept, price negotiations will be part of erpa negotiations, not (non-negotiable) terms and conditions. On the 12. At the FCPF Participants` Committee meeting (June 2012), the FCPF Participants` Committee adopted, by its resolution PC/12/2012/3, the “Recommendations of the Working Group on the Methodology and Price of the FCPF Carbon Fund” (FMT Note 2012-8), which stipulate in its ERPA price negotiation process the possibility of taking into account non-carbon benefits. although there is no systematic quantification of non-carbon pricing benefits under the Carbon Fund. There are many types of ERPA documents that have a different impact on a project and its participants….