Carbon Credit Quality Initiative

Many countries, companies, organizations, and individuals want to do their part to mitigate climate change by reducing their own greenhouse gas emissions. By purchasing carbon credits, they can offset emissions that they cannot reduce in the near term, allowing them to take more ambitious climate action.

Carbon credits are issued by carbon crediting programs to the developers of mitigation activities, like a solar energy farm that displaces a highly polluting energy source, or a protected rainforest that would otherwise have been cut down. These activities reduce emissions or enhance removals of greenhouse gases from the atmosphere. Those credits may then be sold to buyers to offset some of their emissions voluntarily or to comply with an emissions target. They can additionally be used as mitigation contributions (outside of offsetting claims) or as metrics for performance under performance or results-based finance.

Sound crediting systems can be an integral part of good climate policy. However, if the quality of the credits and their underlying projects is not guaranteed, buyers of carbon credits may risk doing harm to the environment, climate and communities. The Carbon Credit Quality Initiative aims to prevent this, and ensure, via a user-friendly and comprehensive guide, that buyers can identify high quality carbon credits to purchase. 

More of EDF's work on carbon markets

How does a buyer ensure the carbon credit they purchased is of high quality? Assessing and ensuring the quality of carbon credits is challenging in practice. Moreover, buyers that purchase low-quality carbon credits risk damaging both the atmosphere and their reputation.

Given the growing demand for carbon credits and the risks associated with low-quality carbon credits, practical and trusted guidance is critical to help carbon credit buyers navigate the complicated landscape and enable them to identify high-quality carbon credits. Environmental Defense Fund (EDF), World Wildlife Fund (WWF), and Oeko-Institut have teamed up to develop an independent and user-friendly tool to assess carbon credit quality.

In Phase 1 of this project, EDF, WWF and Oeko-Institut authored a paper that identifies a set of “quality objectives” for carbon credits, and elaborates specific criteria that can be used to evaluate credits against each of these quality objectives. The criteria in this document are intended to serve as high-level guidance for current and potential carbon credit buyers.

In Phase 2, EDF, WWF and Oeko-Institut have now developed a comprehensive methodology to score credits, using a scale from 1 to 5, against the criteria determined in Phase 1. The methodology evaluates the project type (e.g., landfill methane reduction), the rules and methodologies used by the carbon crediting programs, and the host country in which the project is implemented. The methodology also went through an extensive public consultation and peer review process to ensure rigor and credibility.

Oeko-Institut is rolling out the application of the methodology on three popular project types: landfill gas utilization, efficient cookstoves and afforestation and reforestation projects. The resulting demonstration of a user-friendly tool is now available at carboncreditquality.org.

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