The PACM enables countries, companies and organisations to invest in verified emission reduction or removal projects in order to achieve their climate targets. Two types of certificates are issued: Authorised Emission Reductions (AERs) and Mitigation Contribution Units (MCUs).
Strict testing and approval procedures are designed to strengthen confidence in such project mechanisms. The tradable CO2 certificates can be used not only for partial crediting towards countries’ reduction targets, but also for aviation under the CORSIA mechanism. Companies can also offset their greenhouse gas emissions with AERs and MCUs, although it is still uncertain whether there will be proportional use in the future within the framework of the EU ETS emission allowance trading scheme.