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Requirements and standards to ensure a carbon offsetting initiative that will deliver strong environmental and social benefits
Carbon offsetting requires a rigorous approach to ensure environmental integrity and social benefits, while avoiding greenwashing or adverse social side effects. The main requirements are:
• Offsetting shall follow an ambitious, effective and continuous GHG emissions reduction plan.
• Measure carbon footprints in a rigorous and exhaustive way, set goals, deliver action, and offset what could not be avoided.
• Review goals and action plan with sufficient frequency, in a journey towards partial or total carbon neutrality within a time-bound plan.
• Ensure additionality of support to the program that will provide you with carbon credits. Additionality simply indicates that the offset would not have taken place without carbon payments.
• Ensure that the program follows the methodologies recognised by the market under the umbrella of UNFCCC.
• Ensure permanence, which means that the emissions are not simply being delayed.
• Avoid double-counting and leakage, meaning that the offset is not being retired more than once and that the emissions reduced by a project’s activities aren’t being displaced to some other geographic location.
• Avoid potential adverse impacts of the program on communities, by getting their full, prior and informed consent and creating local economic and social benefits.
Different non-profit organizations have created third-party voluntary standard bodies that ensure that these previous requirements are met by the programs. The two most important are the Verified Carbon Standard (VCS) and the Gold Standard. These were created by non-profit organisations such as the International Emissions Trading Association for the former while the World Wildlife Fund for Nature, which was one of the organisations instrumental in the origin of the latter.
In 2017, 99% of offsets in the voluntary carbon markets were certified by a third-party standard. VCS certified almost 60% of the total offsets transacted. Of those previously mentioned, roughly 25% were also certified by the Climate, Community & Biodiversity (CCB) Standards, which focuses on social and environmental co-benefits of land-based projects (but does not issue emissions reduction credits). Other common standards were the Gold Standard (less than 20%), Clean Development Mechanism (CDM) (less than 10%), Climate Action Reserve (less than 10%), and American Carbon Registry (less than 5%). 4% of the total market volume came also from offsets approved under the ISO-14064 standard. This is not a standard often seen, and almost all of the ISO-14064 offsets came from a single large transaction.
Less common standards tended to focus on a particular country, region, or project type. Plan Vivo, or Carbon Farming Initiative (CFI) are for instance dedicated to community land use and forestry projects.
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