Strategies for Avoiding Lower-Quality Offset Credits

Co-benefits / harms

Major carbon offset programs have rules and procedures in place to avoid approving projects that could cause social, economic, or environmental harm. In addition, some carbon offset programs and third-party certifiers offer supplementary certifications for social and environmental benefits produced by offset projects. Buyers can generally rely on these rules and certifications in evaluating potential offset credit purchases, particularly when it comes to identifying projects with positive co-benefits. In conducting due diligence, it may be useful to examine the following questions to reduce the risk of purchasing from harmful projects. Recommended due diligence questions include the following.

For any project type…

  • Prior to implementation, did the project developers engage and consult with local stakeholders potentially affected by the project? Most – but not all – carbon offset programs require that local stakeholder consultations be conducted prior to a project’s registration. Such requirements can be particularly important in developing countries, where there are often fewer regulatory safeguards. If stakeholder outreach was not undertaken this failure should raise concerns, though the seriousness may depend on the type of project involved and where it is located. Some types of projects pose fewer risks to local communities than others.
  • Has the project received any program- or third-party certifications affirming its environmental or social co-benefits? Generally, such certifications (e.g., from the Climate, Community, and Biodiversity Standard; SOCIALCARBON; or programs themselves) can provide added assurance that a project will not cause harm and ensure that project developers have taken into account the concerns of local stakeholders. Projects that have not received any co-benefit certification do not necessarily pose a high risk of harms, but it may be useful to inquire with project developers about why they did not seek certification, if it was an option.

For project types where potential harms are a particular concern…

  • What has the project done to minimize risks and reduce potential harm? In general, it is wise to avoid altogether project types that are associated with social, economic, or environmental harms. If such projects are still pursued, then it is crucially important to understand a project’s specific circumstances, how it has addressed potential risks and the concerns of local stakeholders, and what mechanisms it has in place to both avoid harms where possible and compensate for them if they occur. The CCBS, for example, requires ongoing community impact monitoring associated with forestry projects. It is ultimately up to offset credit buyers, however, to decide whether these mechanisms are sufficient. Visiting the project site is usually the best way to identify potential harm caused by a project. If this is not possible, making a request to visit and reading the developer’s reaction can also be revealing.