What are compensation projects and their allowances?

Often mentioned as "offset projects" in the emission markets terminology. They refer to environmental compensation projects, such as renewable energy, energy efficiency and reforestation projects, which counteract for activities such as generating electricity, flying, heating a building etc. It is part of the flexibility mechanisms (CDMs) that the Kyoto Protocol provides in order to quickly, effectively and inexpensively to compensate for GHG emissions. Compensation projects have additional socio-economic benefits to the developing countries, where they materialise but projects often raised questions and concerns. Concerning acidification, eutrophication and ground level ozone in Europe, compensation projects are undefined. The HGA NOx Scheme in U.S.A. gives a 1,3:1ratio for NOx compensation projects.