Carbon credits are not a simple commodity. As with many products whose quality is difficult for casual buyers to assess, standard-setting organizations have been established to provide quality assurance for carbon credits. These carbon crediting programs[1] range from international or governmental regulatory bodies – such as the 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) they develop and approve standards that set criteria for the quality of carbon credits; (2) they review crediting projects against these standards (generally with the help of third-party auditors); and (3) they operate registry systems that issue, transfer, and retire carbon credits.
More detail on how carbon crediting programs seek to ensure the quality of carbon credits (along with some of their limitations) can be found in High Quality Credits.
Table: Examples of major carbon crediting programs
| "Compliance" Carbon Credit Programs (run by governmental bodies) | Geographic Coverage | Label Used for Carbon Credits |
|---|---|---|
| Article 6.4 of the Paris Agreement[2] | Global | Article 6.4 Emission Reduction Units (A6.4ERs) |
| California Compliance Offset Program | United States | Air Resources Board Offset Credit (ARBOC) |
| Korean Offsetting Program[3] | 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) |
| "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) |
Related pages:
Program Administration & Authority
Independent Crediting Programs
[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.
[2] 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 here: https://unfccc.int/process-and-meetings/the-paris-agreement/paris-agreement-crediting-mechanism/transition-of-cdm-activities-to-article-64-mechanism
[3] The Korean Offset Program allows the use of CERs generated from CDM projects.