What Are Carbon Crediting Programs

Carbon credits are issued by carbon crediting programs. Carbon crediting programs¹ range from international or governmental regulatory bodies – such as the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, which oversees an international carbon crediting program under Article 6.4 of the Paris Agreement – to independent non-governmental organizations (NGOs). Historically, governmental bodies certified carbon credits for regulatory purposes (“compliance programs”), while independent NGOs primarily served voluntary buyers (“independent programs”). More recently, both types of programs have begun to serve both types of markets (see Table below). Each carbon crediting program issues its own labeled “brand” of credit.

Crediting programs perform three basic functions:

1. Developing and approving standards that set criteria for the quality of carbon credits
2. Reviewing crediting projects against these standards (generally with the help of third-party auditors)
3. Operating registry systems that issue, transfer, and retire carbon credits

Read more about what makes high-quality carbon credits and what questions to ask to discern quality.

“Compliance” Carbon Credit Programs (run by governmental bodies)	Geographic Coverage	Label Used for Carbon Credits
Article 6.4 of the Paris Agreement*	Global	Article 6.4 Emission Reduction Units (A6.4ERs)
California Compliance Offset Program	United States	Air Resources Board Offset Credit (ARBOC)
Korean Offsetting Program**	Global	Korean Offset Credit (KOC)
Regional Greenhouse Gas Initiative (RGGI)	Northeast United States	RGGI CO2 Offset Allowance (ROA)
Australian Emission Reduction Fund (ERF)	Australia	Australian Carbon Credit Unit (ACCU)

^* Article 6.4 will allow projects to transition from the Clean Development Mechanism (CDM) if they meet all required conditions as set by Parties to the Paris Agreement. Read more.

^** The Korean Offset Program allows the use of Certified Emission Reductions (CERs) generated from CDM projects.

“Independent” Carbon Crediting Programs (run by NGOs)	Geographic Coverage	Label Used for Carbon Credits
ACR	Multiple countries	Emission Reduction Tonne (ERT)
Climate Action Reserve (CAR)	Multiple countries	Climate Reserve Tonne (CRT)
The Gold Standard	International	Verified Emission Reduction (VER)
Plan Vivo	International	Plan Vivo Certificate (PVC)
Verra – Verified Carbon Standard	International	Verified Carbon Unit (VCU)

Crediting Programs & Markets

Carbon markets can be used for regulatory compliance or for actors to make voluntary avoided emission or enhanced removal claims. Compliance markets are created and regulated by mandatory national, regional, or international carbon reduction regimes. Voluntary markets function outside of compliance markets and enable companies and individuals to purchase carbon credits on a voluntary basis with no intended use for compliance purposes. Compliance carbon market credits may in some instances be purchased voluntarily by non-regulated entities, but unless explicitly accepted into the compliance regime, voluntary carbon market credits are not allowed to fulfill compliance market demand.

The concept of carbon offsetting arose in the late 1980s, as policymakers first began to seriously grapple with how to mitigate climate change. Although the first demonstrations of carbon crediting projects involved voluntary arrangements, the idea evolved into a tool for controlling costs within broader “market mechanisms” for addressing greenhouse gas (GHG) emissions, including emissions trading systems. The first and largest carbon crediting program was the Clean Development Mechanism (CDM), established under the Kyoto Protocol as a mechanism to allow developed countries to cost-effectively meet emission reduction obligations by investing in mitigation in developing countries. Because demand for compliance carbon credits is driven by regulatory obligations, their prices tend to be higher than carbon credits issued solely for the voluntary market.

Independent, non-governmental carbon crediting programs serving the voluntary market started to develop after 2005, as the CDM became more established and the corporate social responsibility community began to recognize that there was a demand for these instruments beyond regulated companies and signatory countries to the Kyoto Protocol. There are now a variety of independent carbon crediting programs primarily serving the voluntary market, which is largely composed of corporations wishing to make avoided emissions or enhanced removal claims.

In some cases, non-compliance carbon credit programs have influenced and interacted with compliance markets. In California, for example, the Climate Action Reserve (CAR) developed a series of crediting project methodologies that were subsequently adopted (with some modification) by the California Compliance Carbon Offset Program. Carbon credits issued under these methodologies by CAR prior to the start of California’s cap-and-trade program were able to transition and become eligible for compliance. Countries like Mexico and South Africa have also recognized carbon credits issued by non-compliance crediting programs as a means of complying with carbon tax obligations.

Carbon Market Actors

Brokers and Exchanges

In the carbon credit wholesale market, emission credit buyers and sellers can have transactions facilitated by brokers or exchanges. Exchanges are usually preferred for frequent trades or large volumes of products with standardized contracts or products, while brokers typically arrange transactions for non-standardized products, occasional trades, and small volumes.

Traders

Professional carbon credit traders purchase and sell avoided emissions or enhanced removals by taking advantage of market price distortions and arbitrage possibilities.

Credit Providers

Credit providers act as aggregators and retailers between project developers and buyers. They provide a convenient way for consumers and businesses to access carbon credits from a portfolio of projects.

Final Buyers or End-Users

Individuals and organizations purchase carbon credits to counterbalance GHG emissions. Therefore, the final buyer has no interest in reselling the credit but will prompt the retirement of the carbon credit.

Compliance Crediting Programs

Compliance, also referred to as mandatory or regulatory, crediting systems are regulated by national, regional, or provincial law, and are typically operated in conjunction with mandates on large emission sources to lower their GHG emissions to an established level while allowing trading of permits (i.e., allowances) to emit. For the regulated emissions sources, carbon credits may serve as an alternative compliance instrument to directly lowering emissions or surrendering emission allowances equal to their actual emissions. Carbon credits generated and traded for regulatory compliance typically exhibit commodity pricing, where all carbon credits in a particular program are priced similarly based on the dynamics of supply-and-demand, regardless of project type and other characteristics.

Well established compliance programs exist as regional or national cap-and-trade emission trading systems, such as the Regional Greenhouse Gas Initiative (RGGI) or the European Union Emissions Trading Scheme (EU ETS). The World Bank Carbon Pricing Dashboard tracks which countries have implemented compliance crediting programs and other carbon pricing instruments. The ICAP ETS Map is another publicly available tool which tracks carbon pricing programs globally and provides information, such as whether the program includes a crediting program or not.

In the past, crediting programs were created under the United Nations’ Kyoto Protocol, which significantly shaped existing carbon crediting markets and programs to this day, including new crediting mechanisms under Article 6 of the Paris Agreement.

The Kyoto Protocol to the UNFCCC established a cap-and-trade system between countries that included negotiated national caps on the GHG emissions of high-income countries that ratified the Protocol (called Annex B countries). Each participating country was assigned an emissions target and the corresponding number of allowances – called Assigned Amount Units (AAUs).

Under the treaty, a group of industrialized countries and countries with economies in transition (EIT) had legally binding commitments to reduce their overall national inventory GHG emissions to 5% below 1990 levels during the period 2008–2012. Each country within the group also had a separate target that ranged between an 8% reduction to a 10% cap on increases in emissions.

Countries agreed to meet their targets within a designated period of time by:

• Lowering their own emissions; and/or
• Trading emissions allowances with countries that had a surplus of allowances; and/or
• Meeting their targets by purchasing carbon credits.

The purpose of allowing trading between countries was to lower the overall costs of reducing national inventory emissions. To generate carbon credits, the Kyoto Protocol established project-based crediting programs referred to as “mechanisms:” the Clean Development Mechanism (CDM) and Joint Implementation (JI).

JI was the instrument for crediting projects taking place within countries with binding emission commitments under the Kyoto Protocol (most high-income countries), while the CDM was for crediting projects in countries without such commitments (most low or middle-income countries). In addition to economic efficiency, the CDM had the objective of promoting sustainable development and technology transfer in host countries.

Clean Development Mechanism (CDM)

Part of the UNFCCC, the CDM was the largest project-based crediting program and offered the public and private sector in high-income nations the opportunity to purchase carbon credits from crediting projects in low or middle-income nations (non-Annex 1). CDM was involved in setting standards and overseeing auditing of projects. Crediting projects were audited by accredited third parties named Designated Operational Entities (DOEs).

The CDM allowed Annex I (developed) countries to partly meet their Kyoto targets by financing avoided emission or enhanced removal crediting projects in low and middle-income countries. Such projects were arguably more cost-effective than projects implemented in higher-income nations because lower-income countries on average had lower energy efficiencies, lower labor costs, weaker regulatory requirements, and less advanced technologies. The CDM was also meant to deliver sustainable development benefits to the host country. CDM projects generated carbon credits called Certified Emission Reductions (CERs), which were bought and traded. Read more about the Paris Agreement for more information about international carbon trading under the current climate policy regime.

Type of Standard and Context

The CDM was a project-based carbon crediting program under the Kyoto Protocol. The scheme aimed to assist Annex-I parties (industrialized countries with binding national inventory emission reduction targets) to cut global GHG emissions in a more cost-effective manner by allowing them to invest in crediting projects in non-Annex I parties (low- and middle-income countries without binding targets).

The parties to the UNFCCC negotiated and adopted the Kyoto Protocol in 1997. Initially, they only sketched out the basic features of the crediting program. In 2001, following a series of negotiations, the rules governing the operation of the program were fleshed out in what is now known as the Marrakesh Accords.

The first CDM project was registered in 2004. In the following year, after Russia’s ratification of the Kyoto Protocol saw it enter into force, the first carbon credit was issued to a project. The scheme grew rapidly from its inception and soon dominated the carbon credit market.

Since September 2007, the CDM self-financed its regulatory functions through fees charged to projects. In the absence of a renewed commitment period for the Kyoto Protocol (the Doha Amendment), carbon credits generated in CDM projects were primarily used by voluntary actors (visit the Climate Neutral Now Initiative, which still facilitates voluntary purchases of CERs).

Standard Authority and Administrative Bodies

The CDM Executive Board (EB) oversaw the functioning of the CDM. The EB was ultimately accountable to the governing body of the Kyoto Protocol, which included representatives of all the countries that ratified the treaty. The EB was supported by expert panels that focused on specific tasks.

The Accreditation Panel oversaw the accreditation of designated operational entities or auditors. The Methodologies Panel (Meth Panel) reviewed the methodologies for the 100+ approved project types and the methodologies for setting and monitoring baselines. The Registration and Issuance Team (RIT) was responsible for reviewing requests for project registration and issuance.

Each member country had a Designated National Authority (DNA), confirming projects’ voluntary participation in the CDM and facilitating host countries’ confirmation that the activity assisted national sustainable development.

DOEs were UNFCCC-approved auditors who validated and verified CDM projects.

Regional Scope

The scope of the CDM was international, involving all countries that ratified the Kyoto Protocol.

Recognition of Other Standards/ Linkage with Other Trading Systems

Although the tradable units of other schemes could not be used as CDM credits, several other compliance programs, and voluntary standards either recognized or accepted CERs. Such schemes or standards included the EU ETS and the Verified Carbon Standard (VCS). The Gold Standard certifies projects that use CDM methodologies and also comply with additional Gold Standard criteria.

Join Implementation (JI)

Joint Implementation worked similarly to CDM, with the exception that the host country was not a low and middle-income nation but another Annex I (developed) country. The tradable units from JI projects were called Emissions Reductions Units (ERUs).

Type of Standard and Context

Joint Implementation (JI), like the CDM, was a project-based mechanism under the Kyoto Protocol. It is limited to transactions between countries that have commitments to limit or reduce their national inventory GHG emissions under the Kyoto Protocol. The goal of the program was to increase market efficiency by allowing industrialized countries to invest in GHG abatement projects in another industrialized or EIT country.

Standard Authority and Administrative Bodies

JI distinguished between Track 1 and Track 2 projects. Track 1 projects were approved by their respective host countries. Projects that follow the Track 1 auditing procedure established by their respective host country governments were located in countries that meet all the eligibility requirements for participating in the JI program and were thus authorized. Track 2 projects must be approved by the Joint Implementation Supervisory Committee (JISC). Track 2 projects are located in countries that either do not fully comply with the eligibility requirements for participating in the JI program or meet the eligibility requirements, but have voluntarily chosen to use the Track 2 verification procedure under the JISC. ERUs were issued and transferred by the host country under both the Track 1 and Track 2 auditing procedures.

The JI track 2 program was supervised by the Joint Implementation Supervisory Committee (JISC). The JISC was supported by an expert panel for the accreditation of independent auditors (JI Accreditation Panel) and was ultimately accountable to the governing body of the Kyoto Protocol, which included representatives of all countries that ratified the treaty.

Within each industrialized and EIT country, there was a Designated Focal Point (DFP) that served as the nodal agency responsible for administering JI activities within its jurisdiction.

Regional Scope

The JI scheme was international in its scope, but only industrialized and EIT countries that ratified the Kyoto Protocol could host JI projects and issue the carbon credits (ERUs) generated from the projects.

Recognition of Other Standards/ Linkage with Other Trading Systems

As in the case of the CDM, although the avoided emissions or enhanced removals of other crediting programs cannot be used under the JI program, other compliance programs, such as the EU ETS, either recognize or accept JI ERUs under their programs.

Independent Crediting Programs

Voluntary carbon markets enable businesses, governments, nonprofit organizations, universities, municipalities, and individuals to offset their emissions outside a regulatory regime. These entities can purchase credits that were created either through the voluntary or compliance markets. Trading and demand in the voluntary market are created only by voluntary buyers (corporations, institutions, and individuals) whereas, in a compliance market, demand is created by a regulatory mandate.

Because voluntary carbon credits cannot be used in compliance markets, they tend to be cheaper. Because voluntary credits are typically purchased in coordination with public relations efforts to present a company or organization as a climate actor, many factors can influence a buyer’s interest in a project to best present this image. Pricing in voluntary carbon credit markets reflects this reality, in which buyers have varied objectives in purchasing carbon credits. Voluntary market carbon credits differ in price based on project charisma and potential for marketing, project type, location, and co-benefits beyond climate impact that match with buyers’ preferences.

The voluntary carbon credit market includes a wide range of programs, entities, standards, and methodologies. Carbon credits generated for voluntary markets have been promoted as an opportunity for experimentation and innovation. They have the general advantage of lower transaction costs than carbon credits generated for use in compliance programs.

Voluntary markets also serve as a niche for micro-scale projects that are too small to warrant the administrative burden of compliance crediting programs or for projects currently not covered under compliance schemes. However, the lack of standardized quality criteria, in the early stages of the voluntary market, generated concern from the wider carbon credit market.

In response, carbon market actors launched several efforts to create standards and methodologies to improve the quality and credibility of carbon credits for voluntary use. These standards and independent programs differ significantly in their goals and the services provided.

At one end are complete crediting programs that have developed standards, including rules, requirements, and administrative systems for accounting, quantifying, monitoring, reporting, verifying, certifying, and registering crediting projects and tracking credits. The standards developed by these full-fledged programs tend to build on existing rules and procedures from compliance markets, most notably the CDM. These programs are designed to furnish carbon credit sellers with quality assurance certification and carbon credit consumers with greater transparency and confidence in the credibility and integrity of certified credits.

At the other end are standards that are more limited in scope, such as the International Organization for Standardization (ISO) standard 14064-2 and guidance references like the WRI GHG Protocol for Project Accounting. These standards and guidance provide common definitions, accounting frameworks, and quantification options that can be adopted or adapted by individual crediting programs.

Other standards, such as the Climate, Community & Biodiversity Standards or SocialCarbon Standard provide design criteria to ensure robust project design and, particularly, in this case, local community and biodiversity benefits.

The proliferation of standards, methodologies, and other programs reflects the significant flux and experimentation in the voluntary carbon credit market.

Ambitious Climate Results (ACR)

Type of Standard and Context

ACR, which stands for Ambitious Climate Results, was founded in the USA in 1996, was the first independent GHG crediting registry in the world. ACR was founded by the environmental non-profit organization Environmental Resources Trust (ERT).

In 2007, ERT and its registry became part of Winrock International, a non-profit based in the USA. The registry was re-branded as American Carbon Registry (ACR) in 2008.

In 2012, ACR was accepted as an approved Offset Project Registry by the California Air Resources Board within the California cap-and-trade compliance carbon credit market. Then in 2023 the crediting program rebranded once again to ACR “Ambitious Climate Results” reflecting that its program reaches beyond the Americas.

The ACR Standard outlines the eligibility requirements for registration of project-based carbon credits and includes requirements for methodology approval, project validation and verification, and other procedural requirements and information on the general use of the ACR. View a summary of changes made between versions, and public comment and responses.

Standard Authority and Administrative Bodies

Direct oversight of ACR is provided by the Winrock International Management and Executive Teams, as well as the Winrock International Board of Directors. Technical decisions are made by sector-specific Technical Committees (e.g., Agriculture, Forestry and Other Land Use – AFOLU) who review new methodologies and tools, advise the selection of scientific peer reviewers, and advise ACR on the need to update standards and commission new methodologies or tools.

Methodologies are developed internally by Winrock staff or can be developed by third parties and brought to ACR for approval. All approved methodologies have undergone public comment and blind scientific peer review.

ACR approved Validation and Verification Bodies (VVBs) must meet the competency requirements laid out in ISO 14065 and ISO14066 and be IAF member-accredited in the relevant project sector. VVBs may be chosen from a list on ACR’s website.

Regional Scope

ACR registers crediting projects around the globe, although some sectors and methodologies within the ACR Program prescribe regional applicability limitations.

Recognition of Other Standards / Linkage with Other Trading Systems

ACR methodologies are all based on International Standards Organization (ISO) 14064. ACR allows project developers to use methodologies and tools for GHG measurement from the CDM to the extent that they comply with the ACR’s published standards. Projects may be transferred between ACR and another registry provided all unsold, non-transferred, and non-retired carbon credits are canceled. ACR acts as one of the compliance market registries for the California cap-and-trade regulatory system.

Climate Action Reserve

Type of Standard and Context

The Climate Action Reserve (CAR) was launched in 2008. CAR is a USA based independent program whose projects are implemented within North America.

CAR establishes standards for quantifying and verifying GHG emissions reduction projects, provides oversight to independent third-party verification bodies, and issues and tracks carbon credits, called Climate Reserve Tonnes (CRTs).

The Reserve guides the development of project methodologies (note that the reserve uses the term “protocol” instead of methodology) in accordance with the principles in its Climate Action Reserve Program Manual. CAR typically adopts performance-based project methodologies using industry benchmarks and other defined eligibility criteria that a project must meet to show climate impact and be eligible for CRT generation. The process for methodology development includes a CAR staff-managed expert and stakeholder working group process, public comment, and finally the board approval process.

The California Climate Action Registry (California Registry) is the predecessor organization and legacy program of the Climate Action Reserve. It was a voluntary GHG registry for companies and other organizations established by the California State Legislature in 2001 to encourage and promote early actions to measure, manage, and reduce GHG emissions. To support this goal, the California Registry developed a general reporting protocol, general verification protocol, and a number of sector-specific reporting protocols to enable its members to voluntarily calculate and report entity-wide GHG emissions. The California Registry also produced a series of standardized, performance-based, project-specific methodologies and accompanying verification methodologies to quantify the avoided emissions or enhanced removals from GHG mitigation projects. For example, the first set of project methodologies for quantifying and verifying forestry projects was launched in 2005 and these methodologies were subsequently adopted by the California Air Resources Board in 2007, which recognized the resulting avoided emissions and enhanced removals as early voluntary actions under the California Global Warming Solutions Act of 2006 (AB-32). This act established a program of regulatory and compliance market mechanisms to achieve real, quantifiable, and cost-effective avoided emissions or enhanced removals.

In 2007, CCAR worked with other regional non-governmental organizations to build and launch The Climate Registry, an independent corporate GHG emissions registry for the North American region covering states in the USA, Native Sovereign Nations, Canada, and Mexico. The last year for which the California Registry accepted emissions reports was 2009 and, thereafter, members transitioned to The Climate Registry.

Standard Authority and Administrative Bodies

CAR is administered by employed staff with overall direction from a Board of Directors. The Board of Directors is comprised of representatives from the state government, business, environmental organizations, academia, and others.

CAR’s operations are funded by account holder fees, CRT issuance and transfer fees, grants, contract work, and sponsorships.

Regional Scope

The Reserve provides services to companies and project developers in North America.

Recognition of Other Standards/ Linkage with Other Trading Systems

CAR’s crediting program, including its project-specific methodologies, its verifier accreditation and layers of oversight, have been approved under the Verified Carbon Standard. CRTs issued by the Reserve can be converted into Verified Carbon Units (VCUs) and transferred to a VCS registry. However, VCUs cannot be converted into CRTs.

Verra’s Verified Carbon Standard (VCS)

Type of Standard and Context

The Verified Carbon Standard is a full-fledged carbon offset program developed and run by the non-profit Verra. It focuses on GHG reduction attributes only and does not require projects to have additional environmental or social benefits. The VCS is broadly utilized by the carbon credit industry (project developers, large credit buyers, verifiers, and project consultants) as the largest independent program by credit volume (as of 2024) and is active globally.

Visit the Verra Project Registry to learn more.

The VCS version 1 was published jointly in March 2006 by The Climate Group (TCG), the International Emissions Trading Association (IETA), World Business Council for Sustainable Development, and the World Economic Forum (WEF) Global Greenhouse Register. VCS version 2 was released in October of 2006, as a consultation document, and following public consultation and technical review, the VCS 2007 was launched in November 2007. The Steering Committee who reviewed these comments and approved VCS 2007 was made up of members from NGOs, auditors, industry associations, project developers, and large credit buyers. The VCS 2007.1 added methodologies for project implementation with agriculture, forestry, and other land use (AFOLU) sectors, projects to be included in November 2008. VCS Version 3, was launched in March 2011. Version 3 expanded the scope and functionality of the VCS Program, clarified program rules and requirements, and incorporated the text of program updates issued since the launch of VCS 2007. VCS Version 4 launched in September 2019. Learn more about the most recent program materials.

Start-up funding for the VCS Association came from the Climate Group, the IETA, and the WBCSD. Costs are covered by a levy charged at the point of Voluntary Carbon Unit (VCU) issuance. The VCS is now a program of Verra which houses the VCS, and the CCBS among other environmental standards. The governance structure under Verra remains the same as in previous iterations for the VCS.

Standard Authority and Administrative Bodies

The VCS is managed and overseen by the VCS Program Advisory Group and the Verra Board. The VCS Program Advisory Group provides strategic guidance to Verra staff on the evolution of the VCS Program, Rules, and insight to support the range of user groups.

The Verra Board has a number of responsibilities. It is responsible for approving any substantial changes to the VCS. It also makes a final determination regarding the approval of other GHG programs under the VCS and has the authority to suspend an approved program temporarily or indefinitely if changes are made to it that affect its compatibility with the VCS Program. The Verra Board has the authority to approve accreditation bodies that will accredit auditors. Finally, the Verra Board makes final decisions on any appeals brought forward to the VCS.

The Technical Advisory Groups (TAGs) support Verra by providing detailed technical recommendations on issues related to the program and its requirements (e.g., the AFOLU TAG for bio-sequestration projects).

Third-party auditors must be accredited either under an approved GHG Program or under the ISO 14065:2007 and with an accreditation scope specifically for the VCS project type or approved GHG Program, and region in question. Unlike the CDM, accredited third-party auditors can validate and verify the same project and give final project approval.

Regional Scope

The VCS is an international independent crediting program.

Recognition of Other Standards / Linkage with Other Trading Systems

In early 2008, the VCS Program recognized the CDM and JI, and in late 2008 it recognized the Climate Action Reserve as acceptable to be listed within the VCS Registry and have their project credits converted to Voluntary Carbon Units (VCUs).

A process exists for approving GHG programs that meet VCS Program criteria. The program in question must demonstrate compliance with the VCS Program, hire an external qualified consultant team to complete a detailed gap analysis of the two programs to evaluate the proposed program, and then the Board decides to either fully adopt or adopt elements of the other crediting program based upon the consultant’s analysis report. The approval process is based on the principle of full compatibility with the VCS program, with acceptance required by the Verra Board.

If an entire crediting program is fully adopted by the VCS, all their auditors and methodologies are automatically accepted by the VCS, and credits certified by that standard can be fungible with VCUs. Verra periodically reviews approved programs to ensure continued compliance with the VCS Program.

Gold Standard

Type of Standard and Context

The Gold Standard (GS) is an independent crediting program focused on progressing the United Nations Sustainable Development Goals (SDGs) and ensuring that project’s benefit their neighboring communities. The GS can be applied to independent crediting projects supplying the voluntary market and as an add-on standard for CDM projects. It was developed under the leadership of the World Wildlife Fund (WWF), HELIO International, and SouthSouthNorth, with a focus on crediting projects that provide lasting social, economic, and environmental benefits.

The GS CDM was launched in 2003 after a two-year period of consultation with stakeholders, governments, non-governmental organizations, and private sector specialists from over 40 countries. The GS for voluntary crediting projects (GS VER) was launched in 2006. The GS project registry – containing all projects implemented through the standard was launched in 2018.

For projects to be accepted by GS they must conduct additional assessment of the project’s communal impact and ensure neighboring populations are benefiting.

Standard Authority and Administrative Bodies

• The Gold Standard Secretariat is governed by the Technical Governance Committee, and responsible for the development of all GS standards.
• The Gold Standard Foundation is a non-profit organization. The operational activities of the GS are managed by the Gold Standard secretariat and include capacity building, marketing, communications, certification, registration, and issuance, as well as maintenance of the GS rules and procedures.
• The Foundation Board oversees the strategic and organizational development of the GS. At least 50% of its members must be recruited from the Gold Standard NGO supporter community, and includes the Chair of the Gold Standard Technical Advisory Committee (GS-TAC, see below). In case of significant changes to the GS rules and procedures, the Board decides whether a Gold Standard NGO supporter majority is necessary to implement the change.
• The Technical Governance Committee (GS-TGC) oversees the Secretariat evaluates and approves projects and new methodologies for VER projects, and is in charge of updating the GS rules and procedures. It is the equivalent of the CDM Executive Board (EB)/Methodology Panel for VER projects. GS-TGC members are from the NGO community, multilateral organizations, aid agencies, and the private sector, and all work for the GS on a pro-bono basis.
• The Gold Standard NGO Supporters officially endorse the practices of the GS method and approve major rule changes (e.g., eligibility of project types). Gold Standard NGO Supporters are consulted as part of the GS stakeholder consultations and are invited to take part in the project review process. They may also request an in-depth audit of GS projects at both the registration and the issuance stage.
• The Gold Standard Auditors are UNFCCC accredited DOEs who carry out validation and verification of GS projects. DOEs are not allowed to carry out the validation and the verification of the same project, except for micro- and small-scale projects.

Regional Scope

The GS is an international independent carbon crediting program. The large majority of projects are in developing, low, and middle-income countries.

Recognition of Other Standards/ Linkage with Other Trading Systems

The GS can be applied to CDM projects and many other project types, but GS does not recognize any other independent crediting programs for generating GS-carbon credits.

Plan Vivo System

Type of Standard and Context

Plan Vivo is an independent crediting program for Agriculture, Forestry, and Other Land Use (AFOLU) with a focus on promoting sustainable development and improving rural livelihoods and ecosystem services.

Plan Vivo projects work closely with rural smallholders and communities and the standard emphasizes participatory design, ongoing stakeholder consultation, the use of native species, and biodiversity enhancement within a variety of payment for ecosystem service schemes – including avoided emissions and enhanced removals. The Plan Vivo Foundation certifies and issues forward crediting (‘ex-ante’) and post-sequestration (‘ex-post’) carbon credits called ‘Plan Vivo Certificates’. Ex-post credits can be issued before third-party verification through the submission of an annual report.

The Plan Vivo System originated in 1994 as a pilot research project in Chiapas, Mexico, which aimed to develop a framework enabling smallholders to engage in carbon sequestration activities through accessing funds from carbon markets. This initial pilot project was spearheaded by the Edinburgh Centre of Carbon Management (ECCM, now a Camco company), El Colegio de la Frontera Sur (ECOSUR), the University of Edinburgh, and AMBIO with funding from the UK Department for International Development (DFID). The Plan Vivo system was developed by these partners using the pilot project’s example to shape program methodologies.

Program documents are available online and detail the standard requirements for both project developers and project auditors.

Standard Authority and Administrative Bodies

Plan Vivo is currently managed by the Plan Vivo Foundation, a Scottish non-profit focused on environmental improvement and poverty reduction. The Foundation reviews and registers projects according to the Plan Vivo Standard, issues Plan Vivo Certificates annually following the submission and approval of each project’s annual report and acts as overall ‘keeper’ of the Plan Vivo Standard, which is periodically reviewed in consultation with the Technical Advisory Committee and Stakeholder Groups. It also approves third-party auditors and registers resellers of Plan Vivo Certificates.

Project Developers: Plan Vivo projects are developed and managed by a variety of different organizations, and are, primarily but not exclusively, a combination of international and locally-based NGOs who function as project developers (‘Project Coordinators’). They coordinate sales with carbon buyers, coordinate continued monitoring and community consultation, and administer staged payments for ecosystem services to project participants based on achieved ‘monitoring targets’ laid out in the land-management plans (“Plan Vivos”).

Third-Party Auditors: All Plan Vivo projects must be assessed by independent third parties, both for project validation before registration and project verification every five years thereafter. Validation and Verification Bodies (VVBs) should follow Project Validation Guidance. Find information on validation and verification within the program documents, the list of approved VVBs, and instructions for submitting a new VVB entity for approval.

Recognition of Other Standards/ Linkage with Other Trading Systems

Plan Vivo allows projects that may fit within other standards although projects must inform the Plan Vivo Foundation to ensure double-counting or duplicate claims of the ecosystem services generated by the project does not occur.

Add-on Standards

In addition to carbon crediting programs, there are a number of “add-on” certification schemes for carbon credits. Some of these, like the Climate, Community & Biodiversity Standards or SocialCarbon Standard certify the co-be nefits achieved by crediting projects (but do not otherwise address credit quality).

Others, like Green-e Climate, provide some checks on credit retirement/ownership for retail credit buyers (see Exclusive Claim to Avoided or Removed GHG Emissions), but otherwise, add little value beyond what carbon crediting programs already provide.

Climate, Community & Biodiversity Standards

The Climate, Community & Biodiversity Standards (CCB Standards) is a project design standard that offers rules and guidance for project design and development. It is intended to be applied early on during a project’s design phase to ensure local community and biodiversity benefits. It does not quantify or verify carbon credits nor does it provide a registry. The CCB Standards focuses exclusively on land management projects, and requires demonstration of net-positive social and environmental benefits in addition to robust stakeholder participation.

The CCB Standards is a program of Verra, and was developed by the Climate, Community and Biodiversity Alliance (CCBA) with feedback and suggestions from independent experts. CCBA is a partnership of non-governmental organizations, corporations, and research institutes.

The first edition CCB Standards was released in May 2005, the Second Edition in December 2008, and the Third Edition in 2013. In addition to these milestones, the Rules for the Use of the CCB Standards were added to guide the evaluation of projects using CCB Version 2 in 2010 and became required for use with projects implemented after July 20, 2014.

CCB Standard Version 3.1 updated CCB Version 3, aligning the project development process of CCB more closely with the project development process of the Verified Carbon Standard – VCS (Verra’s voluntary carbon program) to streamline the combined use of the programs for land management projects. Find up to date program materials and guidance on Verra’s CCB Rules and Requirements page.

Standard Authority and Administrative Bodies

The CCB Steering Committee supports Verra in governance, strategic direction and further development of the CCB Standards. The steering committee is comprised of CCBA member organizations: Conservation International, The Nature Conservancy, Rainforest Alliance, and the Wildlife Conservation Society, and the CCBA Secretariat. Verra and the Steering Committee, make decisions about changes to the standards and the rules for their use through semi-annual meetings whose agendas and minutes are posted online. It also produces additional guidance materials to aid application of the standards and combination of the CCB and VCS Standards as needed.

Working groups are comprised of alliance members and external advisors, and are appointed when needed to address specific issues. Working group proposals for changes must be approved by the Steering Committee.

Three international institutions Centro Agronómico Tropical de Investigación y Enseñanza (CATIE), The World Agroforestry Center (ICRAF), Center for International Forestry Research (CIFOR), helped revise the CCB Standards from version 1 to version 2 based on public comments and field-testing. Following additional public comment from CCB Standards users the CCB underwent another round of revision to update the standards to Version 3 and increase their accessibility to smallholder and community led projects.

CCB validations and verifications must be performed by an environmental auditing company with one of the following qualifications:

• Accreditation as a “Designated Operational Entity” for the sectoral scope 14 “Afforestation and Reforestation” or 15 “Agriculture” depending on the applicable sectoral scope(s) of the project type, with the CDM Executive Board;
• Accreditation as a Certification Body for sustainable forest management audits under the Forest Stewardship Council in the geographical area of the project to be evaluated; or
• Accreditation under ISO 14065:2007 with an accreditation scope specifically for the Verified Carbon Standard (VCS) Program covering Agriculture, Forestry and Other Land Use.

View the CCB approved auditors.

Regional Scope

Projects using CCB Standards are worldwide.

Recognition of Other Standards/ Linkage with Other Trading Systems

Since the CCB Standards is focused on social and environmental impact and does not include a mechanism for generating avoided emissions or enhanced removal credits, it is recommended that it is used in conjunction with a crediting program’s carbon accounting standard such as the VCS Program Standard. Version 3.1 of the CCB Standard aligned its process of project development with the VCS Program Requirements to ease the use of both standards in tandem at the onset of project implementation.

SocialCarbon Standard

The SocialCarbon Standard was developed by the Ecológica Institute in Brazil in 1998. It is a methodology that focuses on enhancing co-benefits such as biodiversity and active participation of local communities, similar to the CCBS. SocialCarbon Standard does not quantify or verify carbon credits and is therefore usually used in conjunction with another program, such as the VCS. The project registry for SocialCarbon is available online.

Program documents outline the methodology, which follows the basic structure of the Sustainable Livelihoods Approach (SLA) and utilizes the Sustainability Hexagon tool. If the projects demonstrate improvement in the six realms of the hexagon: carbon, biodiversity, social, financial, human, and natural aspects the SocialCarbon certificate is granted. View project documents to implement these measurement and monitoring practices.

Standard Authority and Administrative Bodies

The Ecológica Institute is in charge of accrediting other organizations who wish to use the SocialCarbon Standard.

Auditors of SocialCarbon Standard projects are called Certifying Entities. View a list of SocialCarbon Standard approved auditors.

Regional Scope

The SocialCarbon Standard is internationally applicable.

Recognition of Other Standards/ Linkage with Other Trading Systems

Because the SocialCarbon Standard is a methodology for monitoring the co-benefits of crediting projects and does not verify avoided emissions or enhanced removals it is usually used in conjunction with another program, such as the VCS or the CDM. VCS and SocialCarbon have jointly developed a guidance document and templates for project developers looking to apply both standards to a crediting project.

Program Administration & Authority

All crediting programs include some form of administrative body to oversee the project approval process to ensure that the crediting projects developed meet established program requirements. Although there are common components of the project approval process, programs have developed varied approaches to key quality assurance concerns.

• Validation requirements provide ex-ante assessment and confirmation of crediting project eligibility as defined by the rules of the program.
• Verification requirements provide ex-post assessments and confirmation of quantification of the volume of avoided emissions or enhanced removals that have been produced from a crediting project across a certain period of time.
• Registries are used to reduce concerns regarding double counting by tracking information regarding ownership of the crediting projects and the credits generated.
• Third-party auditors are required by most programs to help limit any potential conflict of interest between crediting project developers and buyers, which both have financial incentives for inflating the volume of carbon credits generated.

The structure of program administrators varies by program type and design. Compliance programs are generally administered by either an existing regulatory agency or an administrative body established exclusively for the crediting program. Independent crediting programs are managed by a mix of Boards of Trustees, advisory committees, and paid program staff.

Nearly all crediting programs require some form of project validation and verification. Programs require verification to be conducted by an approved third-party auditor independent of the project developer. Some programs give their auditors the decision-making power to approve or reject a project. Others have a separate body to evaluate and approve projects based upon the verification report results. Such a program or standard-based decision-making body adds another layer of quality assurance, as well as administrative burden and cost.

Crediting programs use carbon credit registries to keep track of project and credit ownership and to minimize the risk of double counting. A registry assigns a serial number to each verified carbon credit and once the credit is ‘used’ to claim avoided emissions or enhanced removals, the serial number is retired preventing the credit from being resold. No universal registry exists for either the compliance or voluntary carbon credit markets, but the registries are generally attentive to each other and are able to catch double-counting and double-claiming issues and clearly define ownership.

Methodologies & Standards

The distinction between methodologies, programs, standards, and registries can be confusing since the terms are loosely defined. For example, several crediting programs call themselves “standards”, like the Verified Carbon Standard or Gold Standard, and “registries” like ACR, though these are independent crediting programs that have the same basic functions and components. The general definitions below are suggested:

Project Methodologies

Project methodologies cover GHG accounting rules and program requirements for monitoring, reporting, verification, and certification. In other words, they outline the rules and procedures to determine project eligibility, additionality, and baseline and project emissions for a particular project type. The terms “methodology” and “protocol” are often used interchangeably. Crediting Programs either have their own methodologies for a set of project types or approve the use of methodologies developed by another crediting program.

Crediting Programs

There are three core components of a carbon crediting program:

1. Eligibility definitions and rules for the design and early implementation phase of a project. They can include additionality and baseline methodologies, definitions of accepted project types, and procedures for validating project activities.
2. Monitoring, reporting, verification, and certification rules ensure that crediting projects perform as they were predicted to during project design. Certification rules are used to confirm the actual avoided GHG emissions or enhanced removals that can enter the market, as carbon credits, once the project is implemented.
3. Registration and enforcement systems clarify ownership, enable trading of credits, track credit retirement, and ensure that credits are not double counted through sale to multiple buyers. These systems must include a registry with publicly available information to uniquely identify crediting projects and a system to transparently track ownership and ownership transfers of credits.

Registries

A carbon credit registry is a system for reporting and tracking crediting project information including project status, project documents, credits generated, ownership, sale, and retirement. Crediting Programs must utilize a registry.

Standards

Standards can include methodologies and guidance documents. These standards provide guidance and/or specifications on GHG quantification, monitoring, reporting. Stand-alone standards typically do not have an associated regulatory body that registers projects and also do not typically have registration and enforcement systems to track and ensure legal ownership of carbon credits (e.g., ISO 14064-2). In other words, standards do not have registration and enforcement systems. The use of a standard alone is therefore not sufficient to guarantee the quality of carbon credits. Many crediting programs have their own standards, as part of their program, that outline requirements and guidance for crediting projects using their system.

Registries & Enforcement

Enforcement

Enforcement systems assure that contracts clearly identify ownership of carbon credit and define who bears the risk in case of project failure. Carbon credit registries track crediting projects and issue carbon credits for each unit of avoided emission or enhanced removal that is verified and certified. Registries are vital in creating a credible, fungible carbon credit commodity. Registries record the ownership of credits. A serial number is assigned to each verified carbon credit. When a credit is sold, the serial number for the credit is transferred from the account of the seller to an account for the buyer. If the buyer “uses” the credit by claiming the avoided emissions or enhanced removals against their own emissions, the registry retires the serial number so that the credit cannot be resold. In this manner, registries reduce the risk of double counting. Registration and enforcement systems must include:

• A registry with publicly available information to uniquely identify crediting projects.
• Serial numbers for each carbon credit generated by each project.
• A system to transparently track ownership of carbon credits which makes it possible to trace each credit back to the project from which it originated.
• A system to easily check on the status of a carbon credit (i.e., whether a credit has been retired).
• Contractual or legal standards that clearly identify the original “owner” of carbon credits.
• Contractual or legal standards that spell out who bears the risk in case of project failure or partial project failure (e.g., who is responsible for replacing the credits that should have been produced by the failed project).

Voluntary Market Registries

There are several registries in the voluntary carbon credit market, which have been developed by governments, independent non-profits, and the private sector. The following voluntary registries are currently operating:

• American Carbon Registry (ACR)
• APX Inc. administers the following carbon credit registries:
  • Gold Standard Registry
  • Climate Action Reserve (CAR)
• Markit administers the following carbon credit registries:
  • SocialCarbon Registry
  • Plan Vivo Registry
• Verra administers the following carbon credit registries:
  • Verified Carbon Standard (VCS) Registry
  • Climate, Community & Biodiversity Standards (CCBS) Registry

1. The terms “standard” or “registry” are sometimes used when referring to crediting programs. However, a comprehensive carbon crediting program will consist of more than just a standard and a registry. ↩︎