Strategies for Avoiding Lower-Quality Offset Credits

“Discounting” Offset Purchases

One strategy to address quality risks is to simply retire extra offset credits. For example, to compensate for 100 tonnes of CO2 emissions, a buyer could purchase and retire 200 offset 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 offset credits may be associated with GHG reductions that are non-additional, over-estimated, non-permanent, or claimed by others. It can also help buyers focus on reducing their own emissions, since it effectively increases the cost of offsetting.

While discounting can be part of a responsible strategy for using carbon offsets, it should not be done in the absence of other methods to check for offset quality. Doubling the purchase of non-additional GHG reductions still contributes nothing to climate change mitigation!

[1] Technically, “discounting” refers to issuing fewer credits to a project than the GHG reductions it achieved, but it is often used more broadly to refer to any approach that effectively uses more GHG reductions to offset fewer GHG emissions. It has also been proposed as an approach to be used in regulatory carbon markets; for example, see Warnecke et al. (2014).