An ITMO isn’t a project.
Every ITMO starts with a project that reduces or removes emissions. That could be a renewable energy project, improved agricultural practices, reforestation, or another activity that creates a real, measurable reduction in emissions.
Once those emissions reductions have been measured, verified and authorised under the rules of the Paris Agreement, they may be transferred from one country to another. Once authorised for transfer, those emissions reductions become ITMOs (Internationally Transferred Mitigation Outcomes).
That’s the simple explanation.
The interesting questions come next.
Why would one country want another country’s emissions reductions?
Where does the value come from?
And why does understanding this emerging market matter to investors?
We’ll answer those over the coming weeks.
Next: Why would one country pay another country for reducing emissions?