Even before signing an ERPA, the FCPF requires countries to have a benefit-sharing plan in place that defines how outcome-based payments for carbon credits are shared with indigenous peoples and local communities involved in emissions reduction activities in forest landscapes. Local communities and indigenous groups living in forest areas are key to the success of these programmes. The benefit-sharing plan is consultative, transparent and participatory and reflects the contributions of relevant stakeholders, including broad community support for affected indigenous peoples. Typically, 80-95% of the benefits go to local communities in the form of financial payments or small development projects identified by the communities themselves. Countries like Costa Rica have also included gender equality action plans in their programmes to gain increased support for women. Over the past two decades, the World Bank has disbursed $2 billion in emission reduction payments through more than 200 ERPAs in 65 countries. The Climate Change Fund Field Unit (CCFM) uses ERPAs to support programs that preserve forests, reduce the use of polluting fuels and increase the use of renewable energy. The CCSM hosts various climate-related trust funds supported by donor countries and the private sector, including the Forest Carbon Partnership Facility, which focuses on sustainable forests and land use; the Carbon for Development Initiative (Ci-Dev) to support access to clean energy; and the Carbon Partnership Mechanism (CPF), which focuses on clean energy generation and distribution, low-carbon transport and sustainable waste management. Under the FCPF or CPF, ERPA is a contract between the World Bank as a trustee and the government of a country that focuses on reducing deforestation or implementing clean technologies. Emission reductions are independently verified, certified and credited by the UN or another licensing body. The World Bank then buys the carbon credits from the country and passes them on to the contributors to the FCPF or CPF, most of which are developed countries. Buyers of VER include aggregators, wholesalers, and carbon funds that purchase carbon because they perceive value and expect it to increase in value and can be used for compliance purposes under binding U.S. regulations.

End-users who have adopted climate-neutral commitments or targets to reduce their emissions, create a brand image or familiarise their management in anticipation of binding legislation in their sector are one step ahead. By promoting corporate responsibility and consumer responsibility for their carbon footprint, they will bypass government bureaucracy awaiting a national mandate. Sellers of VER can be farmers who are trying to control methane emissions from animals or change tillage practices, landfills that capture and destroy gas emissions, forestry companies or landowners who agree to protect or replant forests, industrial facilities that have improved their efficiency to the point of significantly reducing emissions, companies that commit to using fuel from renewable energy sources or miners that burn or bind their carbon dioxide. RENEWABLE ENERGY CERTIFICATES (RECs) are a popular method to support renewable energy and achieve the desired goals of sustainability, environmental protection and greenhouse gas reduction. A CER certifies the production of 1 megawatt hour of environmentally preferable electricity from an eligible renewable energy source; such as SUN, WIND, WATER and BIOENERGY. Anyone can buy a REC to support clean renewable energy and reduce their environmental footprint. RECs support domestic energy sources that contribute to reducing the country`s energy security and national security. Certification and verification standards ensure environmental integrity and the delivery of promised benefits. RECs can be mixed to match the customer with a percentage of WIND, biomass, etc. REC`s clients come from the business sector, colleges and universities, government agencies and event organizers. Carbon offsets that have an element of history or that have significant co-benefits are valued at a high price, as are REVs that are verified with the most reputable verifier against the strictest voluntary carbon standard.

The premium is based on the likelihood that the loan will be used in a future U.S. compliance market and whether it has a chance of being resold at a higher price. In a kind of compromise, a buyer of carbon credits pays in cash for the right to emit more than the amount of CO2 allocated in the Kyoto Protocol, and the seller receives money for the obligation to produce less CO2. To comply with this agreement, both parties must sign an ERPA document. ERPAs provide significant financial incentives to encourage governments, local communities, private sector actors and other stakeholders to participate in and benefit from climate-friendly activities. In addition, ERPAs often show their value well before payday and far beyond getting countries to reduce emissions in the deal. Early in its life cycle, an ERPA can act as a powerful tool for private sector participation, which can translate into long-term economic and social benefits for the communities where the programs take place. Indeed, the financial commitment involved in an ERPA can boost investor confidence, attract more financiers to a program, and ultimately lead to higher investments and emission reductions.

The value of global voluntary markets tripled between 06 and 07; 96.7 million to 330.8 million and 63 billion for compliance contracts in 2007. The Kyoto Protocol, signed in 1997 in Kyoto, Japan, by 192 industrialized countries, comes closest to a functioning global agreement to combat climate change. Countries that ratify the Kyoto Protocol will be given a maximum limit on CO2 emissions. Emission above the assigned limit will result in a penalty for the injured country in the form of a lower emission limit value for the following period. However, if a country wants to emit more greenhouse gases than its allowable limit (without penalty), it can participate in emissions trading with an ERPA. Governments around the world need to plan sustainability policies and redouble their efforts to make their infrastructure and energy consumption more efficient. Policymakers must discourage the consumption of non-renewable resources and promote a reduction in human fertility. Solar RPS requirements require utilities/utilities to get a certain percentage of electricity from qualified solar renewable energy sources in their state. If the power supply to solar power generators does not meet the requirements of solar RPS, utilities/utilities can purchase SREC from companies (and owners) that have solar systems and produce SREC.

Carbon offsets represent the act of reducing or avoiding greenhouse gas emissions. .