What Makes a High-Quality Carbon Offset?

How carbon offset programs address social and environmental harms

Carbon offset programs generally have environmental and social safeguard policies designed to reduce the risk of any detrimental effects from registered projects. Nearly all require (and verify) that projects are in compliance with applicable legal requirements. Most offset programs also require local stakeholder consultations as part of the project approval process and have established grievance mechanisms to address complaints about projects after implementation. Finally, some programs – like the Gold Standard – actively require that projects demonstrate social and environmental co-benefits (and not just avoid harms), as well as monitor and report on these benefits.

There are a number of “add-on” certification schemes focused on the social and environmental impacts of carbon offset projects. Organizations like the Climate, Community, and Biodiversity Alliance (CCBA) and SOCIALCARBON, for example, certify the added co-benefits achieved by offset projects (but do not otherwise address offset quality).

Visit our page on add-on standards to learn more.

Carbon offsets as a global mechanism were originally conceived as a means to not only provide GHG reduction benefits but also co-benefits to the communities in the vicinity of carbon offset projects. Co-benefits improve social, economic, and/or ecological outcomes related to the implementation of a carbon offset project. Typical co-benefits include improving: community employment opportunities, air or water quality, biodiversity, and biological habitat conservation, energy access, and access to community health and education services.

When deciding between offset projects, if you are confident in the environmental integrity of each project, then the co-benefits become the distinguishing factors. If supporting a clean cookstove project, the reduction in purchased fuel and more efficient use of fuel presents a compelling story of your organization helping people to save money and improve health outcomes. As a buyer, it is useful to know your prioritization for these project characteristics – do you want to associate your organization with a project that conserves wilderness or benefits communities? Do you want to find a project with a connection to your business operations, products, or supply-chain? Offset purchases possibly represent a public relations risk, if seen as ‘buying out’ of the problem of addressing internal emissions. By supporting projects with high co-benefits, you can turn this risk into an opportunity for positive coverage, but also recognize that projects with high co-benefits correspond with higher offset prices.

Some project types have an especially high risk of causing harm. For example, hydropower projects often require the displacement of the local population, the loss of valuable agricultural land, and the loss of ecosystems. Forestry projects in developing countries also have the potential to cause harm (e.g., because of unresolved land tenure issues or because of the plantation of monocultures which maximize timber production and CO2 sequestration but lead to degradation of the local ecosystem).