Assessing crediting scheme standards and practices for ensuring unit quality under the Paris agreement

Abstract

Under Article 6.2 of the Paris Agreement, countries have the option to use existing crediting schemes, including schemes serving voluntary carbon offset markets, as a basis for trading “mitigation outcomes”. Parties to the Paris Agreement engaged in such trading must seek to ensure its environmental integrity, an essential component of which is ensuring the quality of units (or “credits”) transacted. In deciding whether to rely on existing crediting schemes, therefore, countries must be able to assess the relative quality of the credits these schemes issue. Assessing unit quality can be a complex undertaking involving analysis at multiple levels (e.g. institutions, methodologies, and mitigation activities). An essential requirement, however, is for crediting schemes to have robust standards and practices in place for ensuring unit quality. This paper presents a framework for assessing the standards and practices of crediting schemes on aspects related to unit quality, and road tests this framework on six existing schemes. A key finding is that all six schemes have weaknesses in their standards and practices, suggesting the need for ongoing improvement as carbon market institutions continue to evolve under the Paris Agreement.

Keywords

• carbon markets
• paris agreement
• environmental integrity
• carbon credits
• carbon offsets