Under the Paris Agreement, countries may use existing crediting schemes, including schemes serving voluntary carbon offset markets, as a basis for international emissions trading. When doing so, countries must be able to assess the relative quality of the credits these schemes issue. The authors present a framework for assessing the standards and practices of crediting schemes related to credit quality and road test it on six existing schemes.
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Article 6 of the Paris Agreement introduces provisions for using international carbon market mechanisms to fulfil nationally determined contributions (NDCs). One of these includes the use of internationally transferred mitigation outcomes (ITMOs) under Article 6.2. One possibility for implementing Article 6.2 is that countries could use existing carbon markets – e.g. existing crediting schemes and emissions trading schemes (ETSs) – as the basis for certifying the mitigation outcomes that are traded internationally. Fundamental to the success of these cooperative mechanisms is the concept of environmental integrity, implying that the use of cooperative mechanisms should not result in increased global emissions compared to a scenario without such cooperation.
This paper addresses the question of unit quality for carbon offset credits. Unit quality is defined to mean that the issuance or transfer of one unit, expressed as 1 tCO2e, is associated with an emission reduction of at least 1 tCO2e in the transferring country, compared to the situation in the absence of the carbon market program.
The authors propose a framework for evaluating the standards and practices of crediting schemes and presents the preliminary results from applying this framework to six existing schemes.
Perspective / A narrow focus on removal-based offsets -- such as those for forestry projects -- can be counterproductive to meeting climate goals.
Perspective / In this piece for Reuters Breaking Views, SEI's Derik Broekhoff explains how to avoid a "train wreck" amid a surge in voluntary demand for carbon credits.
Other publication / This brief explores four important carbon-intensive industries in the U.S. and discusses the key policy considerations for achieving their decarbonization.
