21 Jan 2019

Carbon Credits - High vs Low Quality

Posted in: Carbon Credits

Carbon Credits - High vs Low Quality

Wind FarmThere are many carbon credit options out there, from all over the world, but they are not all created equal. In fact, there can be significant issues with credibility which makes it difficult to know which credits are real and reliable. There are three main questions you need to ask to ensure you can claim carbon neutrality with confidence. Of course, you can always just come to us!

What standard is that?

First things first, have the carbon credits been created under a standard at all? If the answer is ‘no’, stop right there! A standard means that the carbon credits have been created in compliance to a set of rules and criteria that reflect essential guiding principles (see next question). There are a range of standards that supply carbon credits. We only source credits that have been issued from reputable standards, e.g. Gold Standard, Clean Development Mechanism and Permanent Forest Sinks Initiative. But we go further and assess each project we plan to use even if it’s from an acceptable standard, just to make sure.

Organisations that participate in a compliance market (get a refresher here) can only use credits from standards specified by their market. Organisations that voluntarily offset can use credits that adhere to compliance or voluntary standards.

What are the principles I should be looking for?

There are a number of generally accepted guiding principles to ensure a credible emissions reduction (or storage or avoidance) project. In a nutshell, these are;

  • Additionality: the emissions reduced, avoided, or sequestered are additional to business as usual, or would not have occurred without the carbon finance.
  • Permanence: the carbon credit is permanent and won’t be reversed.
  • (Avoidance of) leakage: emissions haven’t occurred outside of the project, because of the project.
  • Measurable: the carbon credits being claimed are quantifiable (using recognised tools).
  • Verifiable: an independent third-party has assessed the project and data.
  • Transparency: reports must be publicly available.

Toitū Envirocare adds on further goal posts to its programmes: traceability, sustainable development performance, authority, carbon rights, vintage, equivalence, prevention of double counting and no forward purchasing.

Are there any specific risks for the project type that I’m considering?

We consider each project carefully on an individual basis to ensure there is no risk that the credits being claimed aren’t real, aren’t additional or there are other non-negotiable environmental issues caused by the project. For instance, if a particular large scale hydro power plant is developed and issues credits, but the local villages are displaced in the process, then it’s socially unacceptable – we won’t use them.

So, in summary…

Remember, price isn’t necessarily the best reflection of quality. Some of the other influencing factors can be: whether the carbon credits adhere to a compliance or voluntary standard, their perceived value, demand from organisations wishing to buy them and even the exchange rate.

The bottom line? We have stringent sourcing rules to obtain high quality credits from a range of national and international projects that have many and varied co-benefits - so you can have confidence in the credibility of any of the projects we source.

Not sure what we’re on about? Have a read through our Carbon Credits 101 article. Stay tuned for our upcoming series of articles exploring the various projects we supply carbon credits for. Sign up to our mailing list to receive regular insight, news and views on sustainable business best practice.

To get more information on carbon credits and how your organisation can make informed offsetting choices - talk to our experts today.