Strategies to Avoid Lower-Quality Carbon Credits

Making up for lower-quality by “discounting” or “over-buying”

One strategy to address quality risks is to simply retire extra carbon credits. For example, to compensate for 100 tonnes of CO2 emissions, a buyer could purchase and retire 200 carbon credits from a range of different projects. This approach is commonly referred to as “discounting.”[1]

Although this strategy does not address quality directly, it hedges against the risk that some carbon credits may be associated with avoided emissions or enhanced removals that are non-additional, over-estimated, non-permanent, or claimed by others. It may also help buyers focus on reducing their own emissions, since it effectively increases the cost of offsetting.

Pros: Discounting or “over-buying” credits can help make up for deficits in quality across a portfolio of carbon credits and project types. It can be particularly useful where the recognized quality deficit relates to overestimation. For example, if you know that a project was issued twice as many credits as it should have been, then purchasing and retiring two credits for every tonne of claimed mitigation could be an effective strategy.

Cons: While discounting can be part of a responsible strategy for using carbon credits, it should not be done in the absence of other methods to assess quality and avoid lower-quality credits. Doubling the purchase of non-additional credits still means that 100% of your purchases are non-additional!


[1] Technically, “discounting” refers to issuing fewer credits to a project than the avoided emissions or enhanced removals it achieved, but it is often used more broadly to refer to any approach that effectively uses more than a 1:1 ratio of carbon credits to compensate for tCO2e emissions. It has also been proposed as an approach for use in regulatory carbon markets; for example, see Warnecke et al. (2014).