Carbon offset project types

Carbon offsets Carbon offsets can be created by a number of different offset project types, all of which do one of the following: avoid, reduce, remove, or destroy greenhouse gas emissi

CARBON OFFSET PROJECT TYPES

Section 2

Carbon offsets

 Carbon offsets can be created by a number of different offset project types, all of which do one

of the following: avoid, reduce, remove, or destroy greenhouse gas emissions

 The share of different project types in the voluntary market is constantly evolving, based on demand and project availability

Renewable energy projects

For example: Wind or solar

-> Avoid the greenhouse gas emissions associated with burning fossil fuels to generate electricity or heat

Energy efficiency projects

For example: Installing more efficient lighting systems

-> Use less energy and thus reduce greenhouse gas emissions

Other projects

Tree planting

Soil-management techniques

Landfill gas recovery

 Renewable energy and energy efficiency projects are generally most likely to offer high quality offsets

 Renewable energy and energy efficiency projects not only result in a measurable and

irreversible (i.e., permanent) climate benefit, but they also avoid or reduce the burning of fossil fuels

 These projects also support the transition to a sustainable energy economy, something that is urgently needed if we are to address the problem of climate change

USING QUALITY CRITERIA

TO COMPARE CARBON

OFFSETS Section 3

ARE ALL CARBON OFFSETS THE SAME?

THE CRITERIA THAT MAKE A HIGH QUALITY OFFSET

1 Additionality

3 Auditing (validation and

verification)

Auditing in the form of validation and verification provides assurance that

statements made about an offset

project’s emission reductions are true and correct

4 Unique ownership

 Because offsets are an intangible commodity, it is especially important that clear ownership rights are established to the greenhouse gas reductions that the offset represents

 Offsets should be backed by legal instruments that clearly demonstrate

exclusive, enforceable ownership rights of the reductions

5 Permanence

6 Leakage

 Leakage refers to a situation where a greenhouse gas reduction in one region causes an increase in emissions somewhere else

 Energy efficiency projects might also lead to leakage; for example, the

money saved through reduced energy consumption might be used to pay for something else that will have corresponding greenhouse gas emissions

7 Sustainability (social and

environmental) considerations

8 Stakeholder consultation

 Evidence of stakeholder consultation – locally and with offset project experts from around the world – can provide greater assurance that the project does not have adverse social, environmental, or economic impacts, particularly on the community where it is developed

 If stakeholders foresee problems with the project, this feedback should at least be considered and addressed by the project to the degree that is

possible

9 Timing

Some vendors sell offsets for reductions that haven’t yet been achieved, but are planned to be achieved in the future This is sometimes referred to as “forward crediting”

This practice can create two problems:

First problem:

Second problem:

CARBON OFFSET STANDARDS

 Because assessing offsets according to the criteria above can be difficult for the average purchaser to do by themselves (especially since the information required often isn’t available on a vendor’s website), a number of offset

standards have been developed

 Standards are particularly important in the voluntary carbon market because there is little or no government oversight of offsets in the voluntary market

1 The Clean Development Mechanism (CDM)

 CDM was developed for compliance with the Kyoto Protocol, and CDM carbon credits are reviewed by United Nations-accredited auditors

 CDM credits must be located in developing countries, and are sold in both the voluntary and compliance carbon markets

2 The Gold Standard

 Was developed by the World Wildlife Fund (WWF) and other organizations to address concerns that the CDM standard for offsets might not adequately promote sustainable development and protect the environment

 It follows the CDM process but adds further requirements, and also limits eligible offset project types to renewable energy and energy efficiency

3 The Voluntary Carbon Standard

(VCS)

 Was developed by an industry-led group of stakeholders

 It was designed to be a relatively basic standard, and is less rigorous than

either The Gold Standard or the CDM with regard to basic quality criteria such

as additionality