Regulator
Regulator: The Government entity (or entities) mandated by law to regulate and govern the carbon market. Functions include establishing the parameters for the market and its regulation, including defining the scope of the market and the rules for creating and distributing emission units, establishing registries, issuing credits, and setting rules for enforcement, trading, and accrediting certain types of market participants such as auditors. The regulatory role includes: conducting inventories; establishing the cap; allocating allowances; setting and enforcing penalties; and in some cases, establishing linkages with other ETSs and/or offset mechanisms.
Covered Entity
Covered Entity: an entity required to comply with the emissions cap.
Seller: a primary or secondary seller of allowances. In the “primary” market, a covered entity whose emissions are lower than its allocation may sell excess allowances. After the initial purchase and sale, “secondary” market participants may buy or sell emission units on the market, subject to established rules. Sellers must demonstrate legal ownership, which they transfer to the buyers. Buyer: a purchaser of allowances. This can be for compliance, market making, speculation, or voluntary purposes.
Traders / Market Makers
Traders / Market Makers: entities offering trading platforms for allowances, execution of trades on behalf of buyers and sellers, and/or the purchase or sale of allowances on their own account or on behalf of others. Other stakeholders: In addition, public and private stakeholders may include government negotiators, government agencies, public and/or private auditors, financial institutions, technology vendors, the community affected by the activities of a covered entity/project, Nongovernment Organizations (NGOs) and consultants.