Exploring offset project value through the Carbon Offset Evaluation Template.
Carbon Offsets Explained
What are carbon offsets?
Carbon offsets are developed to evidence the achievement of project-based emissions reductions, for use in voluntary markets serving corporate and retail consumers, and for compliance markets needed to achieve emissions reductions for use by emitters covered under government-mandated systems. Projects meet different offset protocols or standards, which are validated and verified by an accredited third-party. Carbon offset projects fall into a variety of categories, including transportation, energy efficiency, fuel switch, afforestation and reforestation, biomass energy, improved forest management, recycling, landfill gas capture, and waste diversion. As government policies, laws, and regulations shift, so do the standards for what qualifies as a carbon offset. As governments strengthen industrial regulations for carbon emissions, some types of carbon offsets will no longer be additional or viable as emissions reductions that underlie an offset.
Criteria for Comparing Offsets
Though carbon offsets have been part of the sustainability landscape for over 15 years, it can be difficult to assess the quality of carbon offset credits. The assortment of voluntary and compliance offset standards, vast range in project quality and uneven tempo of interest in offsets make purchase decisions difficult for both vendors and consumers. Understanding and utilizing the criteria discussed in the following section for determining high quality offsets will allow buyers to best select and sell carbon offsets that resonate with its brand, market, and values.
The following Carbon Offset Evaluation Template functions as a tool to assess the quality of a carbon offset project based on its offset developments documents, including Project Design Document, Validation Statement, Verification paperwork and Issuance documents – along with whatever other reliable sources of information can be gathered.
The left column indicates the project Element under review. Middle column covers Description and Significance of Element. The right column indicates the Project Evaluation Standard with guidance on how to assess the project Element as being addressed as excellent, present or absent. The list of Elements in this guide is adapted from BC’s Pacific Carbon Trust original Project Idea Document template, modified by Brinkman Climate and Ecotrust Canada. Ecotrust Canada Climate Innovation has developed the Description and Significance of Element, plus Project Evaluation Standard from a variety of standards & sources, and aims to present it as an up-to-date synthesis of best practice in the carbon offset space.
Rather than seeking to create a brand new metric device for rating and ranking offset quality, Ecotrust Canada has sought to draw a balance between providing assessment tools, and recognizing the subjective nature of offset quality assessment across differing standards and sectors. Standards bodies like those behind the Verified Carbon Standard, the Gold Standard, the UN Clean Development Mechanism and the various Provincial systems are qualified and tasked with delineating clear rules for eligibility and quality of projects under their system. With the task of facilitating assessment of project quality across the broad range of Canadian offsets and standard, we settled on three potential rankings for each project Element – excellent, present and absent. The ranking of each element may be summed across the entire project to give a certain level of ranking against other projects if desired. That said, as different project Elements will be of different importance in comparison to others, and this will vary by project as well as by audience, there remains a significant element of subjectivity left up to the assessor when reviewing a project. We feel this is appropriate given the complexity, variety and diversity of offset projects.
This Carbon Offset Evaluation Template may be used as an aid to assessing offset project quality by proponents, prospective buyers, investors and other stakeholders. The guidance, though prepared with care, should be considered general, subjective and of varying relevance based on specific offset standards requirements. It is meant to assist the reader in understanding the key elements of an offset project, and as a template for deeper assessment of specific projects.