There are two main categories of carbon credits: voluntary and certified. Voluntary credits are also known as offsets. As the name suggests, voluntary emission reductions are produced and purchased by entities that are not obligated to reduce greenhouse gas emissions. Certified emission reductions, on the other hand are produced within a regulated jurisdiction in which emitters are obligated by law to purchase credits equivalent to their surplus greenhouse gas emissions.
Certified emission reductions are created by following the strict rules of a regulating jurisdiction. Voluntary emission reductions or offsets can be produced under any number of different and competing protocols. Because there is no single rule or regime, offset project managers need to review the options and choose the most appropriate certification scheme for their project.
Certification Organizations
Five of the leading certification organizations that project managers can employ to verify their voluntary emission reduction projects include:
- ISO 14064: The International Standards Organization has developed several tools specific to the quantification, validation, verification, monitoring, and reporting of greenhouse gas emission removals or reductions. This standard is recognized worldwide and has been adopted by the Canadian Standards Association.
- World Resources Institute GHG Corporate Accounting and Reporting Standard: The WRI GHG Protocol was developed in partnership with the World Business Council for Sustainable Development. This protocol is recognized worldwide and has been adopted as the reporting standard by governments throughout the world including the Environmental Protection Agency of the United States.
- Voluntary Carbon Standard: The Voluntary Carbon Standard was developed by the International Emissions Trading Association and the Climate Group as both a registry and protocol for validating and verifying voluntary emission reductions. This standard is widely recognized in the offset industry as a transparent and valid registration protocol for earning carbon credits.
- The Gold Standard: The Gold Standard Certification was developed by the World Wildlife Foundation in response to concerns that emission reduction projects were not contributing to local environmental and social sustainability. The Gold Standard Certification process is an extra level of oversight that can be integrated into any certification program. The Gold Standard certification adds value to voluntary or certified emission reduction credits and is occasionally requested by offset purchasers.
- Carbon Disclosure Project: The Carbon Disclosure Project is a not-for-profit organization that holds the world’s largest database of corporate carbon information. Although it is not strictly a registry or reporting standard, their questionnaire is often used as the benchmark for corporate carbon reporting.
Carbon Offset Registration
In order to realize profit from emission reduction projects it is important to identify and follow a standard certification protocol. There are several options available in the marketplace today. Buyers of carbon credits demand rigorous standards and proof of certification when purchasing carbon offsets. Businesses will want to engage one of the top certifiers to make their offsets attractive to potential purchasers.
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