Strategies for Avoiding Lower-Quality Offset Credits

Sticking to Lower-Risk Project Types

Although many kinds of projects can deliver GHG reductions, some types of projects have a harder time meeting essential carbon offset criteria than others. It is generally easy to show that industrial gas destruction projects are additional, for example: as long as they are not required by law, there are few if any reasons to undertake them aside from generating carbon credits.[1] For many renewable energy projects, on the other hand, careful scrutiny is required to determine whether the prospect of carbon credit sales played a decisive role in their implementation (and even with such scrutiny, it can be hard to be certain – they are often on the margin of viability with energy sales revenue alone).

Perhaps the easiest way to reduce the risk of buying low-quality offset credits is to restrict purchases to credits that come from lower-risk project types. The below sub-pages provide an overview of the relative offset quality risks associated with common types of carbon offset projects, distinguishing between low, medium and high project risk.

There are two potential drawbacks to this approach. First, as the table on Low Risk Project Types indicates, there are only a handful of project types that have low environmental integrity risks as a class. Second, the kinds of projects that can most easily meet environmental integrity requirements tend to be projects that offer the least in terms of environmental and social co-benefits – and vice versa. Often, a buyer must choose between a project type with lower quality risks and one with greater co-benefits. A project that avoids N2O emissions at a nitric acid plant, for example, will generally be highly additional, easy to quantify, will pose no ownership or permanence concerns, and will not cause social or environmental harms – but it will do little to enhance people’s livelihoods or otherwise improve the environment. An agroforestry project that sequesters carbon in trees across many small farms, on the other hand, may yield a multitude of local benefits – but its GHG impact will be harder to quantify, and the carbon stored in trees may not be permanent. These kinds of trade-offs can be observed in the tables for Low, Medium and High Project Risk, which also identifies project types that offer the greatest potential for social and environmental co-benefits.

OFFSET PROJECT TYPES AND RELATIVE QUALITY RISKS

Some types of carbon offset projects have an easier time meeting essential carbon offset criteria than others. In the following tables, we distinguish between “lower risk” project types, where individual projects will frequently meet all offset quality criteria, and other project types, where more caution may often be necessary. For each project type, we indicate in the tables whether meeting a particular criterion could be relatively difficult and may therefore be of particular concern when considering an offset credit purchase. In the following tables, if a cell is left blank, then the criterion is not a major concern for that project type.

Relative offset quality risk for different project types:


[1] While additionality is not usually a concern, some kinds of industrial gas projects do have issues with baseline estimation and overestimation of reductions.