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A Carbon Credit is a Credit…Right? Better check the label!

| Monday April 21st, 2008 | 1 Comment

CC_logo_small.jpgSo, you have been tasked to procure carbon offsets for your organization. You have your shopping list that includes the key ingredients for success; the number of offsets, a budget and outlet locations. Well, time to get to work and evaluate the best route to achieve the offset objective.


As you begin window shopping, some things become very apparent. How do I compare the price and quality of the vendors, more importantly the source? Welcome to the carbon commodity process. Let’s draw some comparisons between the carbon process and your supermarket shopping list. This week you need a carton of eggs, grilling meat for that first summer barbecue and all the trimmings. In the dairy section you notice eggs come in all shapes, sizes, colors and smattered with “governmental approved, Certified by, inspected by, best before” and other signatories that give their stamp of approval. You breathe easier with your selection of eggs to feed your family breakfast and continue on your way to the butcher counter and find the same controls clearly labeled on that succulent filet mignon that will be a mouth watering barbecue delight.
Keeping this in mind, you look back at your offset credit shopping and vendors list. Questions race through your mind, “where did this offset originate, who owns the project, are there stamps of approval on the package, who inspected and certified the product?” Suddenly, that same comfort you felt by purchasing your carton of eggs and filet mignon is dashed away. The adrenaline rush you feel instantly reminds you that taking a step back and getting a better understanding of how an offset was created and so proudly displayed in the shop window are your first task.
The carbon commodity process is really The Rules of the Game. It is comprised of a series of distinct and integrated activities. Firstly, a project that reduces greenhouse gas emissions is established. The project developer must determine how to substantiate the offset. This involves a documenting process that must comply with the rules of the game. It also defines the rationale for the measuring and monitoring of the data. This is the Validation. Once completed, the stamp of approval must be put on the package. A third party that understands and has extensive knowledge of the rules is required to review the project documentation and associated data measurements that substantiate an offset within the rules. This is the Verification. The project owner and thus the offset credit now have a commodity that can be transacted between two parties.
The carbon commodity markets have not yet determined a Grade AAA classification process for quality offsets. So check the label and the expertise of those that attach the stamp of approval to your credit shopping list. Get cracking and enjoy those eggs!
ClimatePULSE with ClimateCHECK is a weekly column covering various topics in the carbon market. Got a question? Let us hear it!


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  • Ed Hall

    This really helps. Thanks. But now that I understand what goes behind all of this, from a process point of view, I wonder how it plays out on the label.
    For instance, TerraPass has some pretty detailed information about their projects on their website and they make it seem like their offsets meet the highest standards but then other sites like Native Energy or the non-profit LiveNeutral do the same. Yet none of these sites seem to be using the same criteria.
    It’s particularly confusing when I don’t want to be the offset expert, I just want to buy the right offsets for my company and for my family. Help!
    Also, you hear about the Gold Standard, Green E, Chicago Climate Exchange, and the Voluntary Carbon Standard. Which of these is better? Are they interchangeable from a quality standpoint?