Verification of Carbon Credits and the Registration System

While individuals and businesses worldwide recognize the importance of reducing greenhouse gas (GHG) emissions, completely eliminating their carbon footprint alone is nearly impossible. This is where the voluntary carbon market comes into play.

Through the carbon market, individuals and businesses can neutralize—or offset—their emissions by investing in emission avoidance or reduction projects, or in carbon removal projects that take carbon out of the atmosphere. Businesses can also pay other companies with surplus carbon "budget" to offset their own emissions.

The price and calculation of carbon credits are typically determined by the USD value required to reduce carbon (or other greenhouse gases) in the environment per ton. Each ton of emissions reduced by an environmental project generates one carbon credit or carbon offset.

Verified Emission Reductions (VERs)—also known as carbon credits or carbon emission reduction credits—are considered reductions from a compensatory project that has been independently audited according to a third-party verification standard. Traditional offset projects include reforestation and improved forest management, methane capture and destruction, and fuel switching.

Of course, verifying that emissions reductions from these offset projects are actually occurring is crucial. Here’s how this verification process works.

How to Verify Emission Reductions?

Before any greenhouse gas (GHG) reductions can be certified for use as carbon credits, they must be demonstrated to meet specific carbon credit quality criteria. Most carbon credit programs have approved methodologies (also called protocols) that cover various types of projects.

The most common verified emission reduction standards on the voluntary carbon market include:

1. Verified Carbon Standard (VCS): A global standard for voluntary GHG reductions and removals. The VCS sets rules and requirements that all offset projects must follow to be certified. Verra (formerly known as the Verified Carbon Emissions Standard) oversees the VCS program and is responsible for updating its rules. [1]
2. Climate Action Reserve (CAR): A U.S.-based offset program that focuses on ensuring transparency in the North American voluntary carbon market. CAR oversees multiple independent verification bodies, issues, and tracks carbon credits generated from offset projects in a publicly accessible registry. CAR’s GHG reduction program is approved under the VCS. [2]
3. Gold Standard: This certification program ensures that carbon credits are verifiable and that projects make significant contributions to sustainable development. The Gold Standard program is open to all non-governmental community organizations. To qualify for Gold Standard certification, a project must align with the United Nations’ Millennium Development Goals and reduce one of three GHGs: carbon dioxide, methane, or nitrous oxide. [3]
4. American Carbon Registry (ACR)Oversees the registration and verification of carbon offset projects in both the voluntary carbon market and the regulated carbon market in California. In the voluntary market, ACR monitors the independent registration and verification of offset projects from around the world.

What is the Verification Process?

All credits issued from any major carbon standard undergo a thorough verification process carried out by an accredited independent verification organization. Verification activities vary depending on each project but generally include continuous monitoring and reporting to ensure that the greenhouse gas reduction projects are occurring as intended.

All projects must be tracked on registration systems to ensure that emission reductions are not double-counted. Greenhouse gas registration systems are platforms for reporting and tracking mitigation project information, including credits generated, ownership, sales, and retirement.

There are dozens of greenhouse gas registration systems worldwide, and most can be categorized into two different types: emissions tracking systems and carbon credit accounting systems.

Emissions tracking systems identify emission reductions at the source, so others can track credits as they enter the carbon market. In the United States, there are voluntary registration systems that collect emissions data from companies, including the Emissions Database, the California Climate Action Registry, and the U.S. Department of Energy's 1605(b) Voluntary Reporting Program.

Carbon credit accounting systems, on the other hand, are designed to "track transactions," following the ownership of VERs as they are bought and sold. All Gold Standard projects, for example, are retired on the IHS Markit registry, an independent organization that enhances transparency in the global environmental market.

It is important to note that some of the most modern carbon removal projects are not verified in the traditional way—some companies are increasingly investing in carbon removal technologies designed to extract carbon dioxide from the atmosphere and either store it underground, reuse it, or convert it into minerals. While carbon credits remain an effective tool for bending the climate curve, scientists warn that the need for climate action will soon exceed what can be achieved through greenhouse gas reductions alone.

Source:patch.io