Offsets Should Be Real
Offsets should come from real projects that have actually been implemented or will be implemented (see Contract Terms).
Offsets Should Be Additional
Because offsets are used to compensate for emission that the buyer produces, it is vital that the offsets come from a project that would not have happened otherwise. Such a project is called 'additional,' as in additional to business-as-usual. Determining additionality is an essential but difficult. There are many different approaches to testing for additionality. Learn more about additionality here.
Offsets Should Be Based on a Realistic Baseline
The baseline estimates what the emission would have been, if the offset project was not implemented. it is therefore a hypothetical calculation and has to be done carefully and conservatively so that the achieved emission reductions are not overestimated.
Offsets Should Be Quantified & Monitored
Emission reductions from offset projects need to be accurately quantified. This requires experts from the fields (e.g. engineers who are familiar with measuring and quantifying methane emission from landfills). Each offset project should use an established standard to develop its baseline and monitoring plan. (See Offset Standards).
Offsets Should Be Independently Verified
All GHG reductions should be verified by an independent, qualified, third-party verifier according to approved methodologies and regulations. Verifiers should be entities whose compensation is not in any way dependent on the outcomes of their decisions. (See Offset Standards).
Offsets Should Be Unambiguously Owned and Listed in a Registry
Clear and uncontested title to offset
credits should be established by contractual assignment and/or government
recognition of ownership rights. Once sold, the
original seller of the offset credit (and the project owner) must cede all rights to
claim future credit for the same reductions in order to avoid double counting.
Offsets must be serialized and accounted for in a registry or other approved
tracking system.(Read about the issue of double counting. Learn more about registries in the policy section of this website)
Offsets Should Address Permanence
There is a risk that emission reductions
generated by bio-sequestration projects can be reversed, and thus are not
permanent (e.g. forest destruction through illegal logging or fire or pests). These risks have to be addresses through buffer zones or temporary credits. (more about this on the page about bio-sequestration projects)
Offsets Should Do No Net Harm and Strive to Lead to Co-Benefits
Offset projects should not cause or contribute to adverse effects on human health or the environment, but should instead seek to provide health and environmental co-benefits whenever possible. (Learn more about co-benefits)
(The offset quality criteria were modified from Ensuring Offset Quality: Integrating High Quality Greenhouse Gas Offsets into North American Cap-And-Trade Policy, July 2008.)