A relatively recent development in the voluntary carbon market is the establishment of initiatives that independently assess both (1) crediting programs and their governance (like the initiatives described in buying credits issued by independently recognized crediting programs); and (2) the relative rigor and quality of individual methodologies used by these crediting programs to register projects and issue credits. These initiatives identify not just credible programs, but also which of the methodologies used by these programs tend to be higher-quality. Projects that follow more stringent methodologies, for example, stand a greater chance of clearing a high bar for quality.
Two prominent examples of these initiatives are the Integrity Council for the Voluntary Carbon Market (IC-VCM) and the Carbon Credit Quality Initiative (CCQI). The goal of the IC-VCM is to identify specific project categories (crediting program and project type combinations) that meet a threshold for quality (or “integrity,” as defined by the IC-VCM). The CCQI rates individual methodologies on a five-point scale, indicating how they compare both within and across crediting programs (which in some cases also considers differences in crediting program governance and procedures).
As indicted in Buying credits issued by independently recognized crediting programs, ICAO is also selective about the specific methodologies that are eligible for use under CORSIA. However, ICAO’s decisions to exclude methodologies are typically based on policy considerations, not an explicit assessment of their quality deficits. The primary hurdle for eligibility under CORSIA is meeting programmatic requirements and it is therefore not strictly comparable to the ICVCM or CCQI initiatives.
Examples
The IC-VCM was established as an independent governance body for the voluntary carbon market, initiated by carbon market stakeholders and leaders in climate finance. It has identified “Core Carbon Principles” (CCPs) that define quality thresholds for specific combinations of crediting programs and carbon credit methodologies. The IC-VCM is in the process of assessing crediting programs’ approved methodologies against the CCPs, initially targeting the methodologies that comprise the largest share of credits in the voluntary market. The assessment will determine which methodologies meet the CCP quality thresholds and can therefore be labeled as higher-quality.
The CCQI is an initiative founded and managed by three non-profit organizations: the Environmental Defense Fund (EDF), the World Wildlife Fund (WWF), and Oeko Institute. The CCQI evaluates crediting programs and individual methodologies and assigns quality rating scores specific to each methodology (see CCQI FAQ for more info). The CCQI has made its methodology publicly available online and publishes the results of scores which are integrated into an online scoring tool. The tool guides users to select the type of project they are interested in, the crediting program, the country of implementation, the timing of the avoided emissions or enhanced removals, and the specific methodology that was selected. Each of these factors can potentially result in different scores based upon the assessment CCQI experts have conducted.
Pros: These initiatives allow buyers to identify carbon credits issued under more rigorous standards and methodologies, thus reducing the risk that the credits will be of lower-quality. This may be a more reliable approach than, for example, sticking to lower risk project types, because even within a project category, the methodologies used by crediting programs can be more or less stringent. Moreover, higher-quality methodologies can help guard against poor-quality carbon credits even for project types with higher inherent risk, thus expanding the pool of potentially “safe” carbon credits.
Cons: Rating credits at the methodology (or program and methodology) level may still be a blunt way to discriminate between higher- and lower-quality credits. There is a still a risk of “bad” (lower-quality) projects being certified under higher-quality methodologies. Conversely, it is often still possible to find higher-quality projects registered under lower-rated methodologies. Truly understanding the relative quality of carbon credits may require project-level reviews, which these initiatives do not provide.