Is Carbon Credit Project Necessary?

Written by

Danny Chen

Often, our resources are limited. In the past, we talked about significance, where it prioritizes the project with systemic importance. However, what if the project itself does not require additional resources and funding to achieve the biodiversity outcome?

And that is our today’s topic: additionality.

Additionality demonstrates the project development would contribute to more carbon reduction/removals and biodiversity outcomes compared with the status quo.

Normally, there are 2 common additionalities: Legal additionality and financial additionality.

Legal additionality: The project itself is not mandated by compulsory regulation. The project itself should not be the cost-shifting tools for organizations to reduce their cost or avoid obligations.

Financial additionality: The project itself is not business viable without the revenue from the sales of carbon credits and its external benefits. The requirement bridge the financial gap when the external cost is not fully integrate into human capital market.

As a stakeholder, here are 3 common requirements for a solid additionality practice

#1 The same biodiversity outcomes are not credited by another nature-related program.

#2 The project is not mandated by any law or compulsory regulations.

#3 The project is not business viable without the revenue from the sales of carbon credits and its external benefits.