Understanding Carbon Offsets
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Carbon Offset Programs

Carbon offset credits are not a simple commodity. As with many products whose quality is difficult for casual buyers to assess, standard-setting organizations have been established to provide quality assurance for carbon offsets. These carbon offset programs[1] range from international or governmental regulatory bodies – such as the United Nation’s Clean Development Mechanism (CDM) Executive Board, which oversees carbon offsets under the Kyoto Protocol – to independent non-governmental organizations (NGOs). Historically, governmental bodies certified offset credits for regulatory purposes (“compliance programs”), while NGOs primarily served voluntary buyers (“voluntary programs”); more recently, both types of programs have begun to serve both types of markets (see Table, below). Each carbon offset program issues its own labelled “brand” of credit.

Offset programs perform three basic functions: (1) they develop and approve standards that set criteria for the quality of carbon offset credits; (2) they review offset projects against these standards (generally with the help of third-party verifiers); and (3) they operate registry systems that issue, transfer, and retire offset credits.

More detail on how carbon offset programs seek to ensure the quality of offset credits (along with some of their limitations) can be found in High Quality Offsets.

Table: Examples of major carbon offset programs

"Compliance" Carbon Offset Programs (Run by Governmental Bodies)Geographic CoverageLabel Used for Offset Credits
Clean Development Mechanism (CDM) 2Developing CountriesCertified Emission Reduction (CER)
California Compliance Offset ProgramUnited StatesAir Resources Board Offset Credit (ARBOC)
Joint Implementation (JI) 3Developing CountriesEmission Reduction Unit (ERU)
Regional Greenhouse Gas Initiative (RGGI)Northeast United StatesRGGI CO2 Offset Allowance (ROA)
Alberta Emission Offset Program (AEOP)Alberta, CanadaAlberta Emissios Offset Credit (AEOC)
"Voluntary" Carbon Offset Programs (Run by NGOs)Geographic CoverageLabel Used for Offset Credits
American Carbon RegistryUnited States, Some InternationalEmission Reduction Tonne (ERT)
Climate Action Reserve (CAR)United States, MexicoClimate Reserve Tonne (CRT)
The Gold StandardInternationalVerified Emission Reduction (VER)
Plan VivoInternationalPlan Vivo Certificate (PVC)
The Verified Carbon StandardInternationalVerified Carbon Unit (VCU)



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[1] The terms “standard” or “registry” are sometimes used when referring to offset programs. However, a comprehensive carbon offset program will consist of more than just a standard and a registry.

[2] Although the CDM has functioned primarily as a regulatory program under the Kyoto Protocol, it now also caters to voluntary purchasers.

[3] Like the CDM, “Joint Implementation” is a separate offset program established under the Kyoto Protocol; the CDM applies only to developing countries, while JI is used in developed countries.