Danny Chen
Carbon Credits Common Myths
This is an old topic; I first saw people talking about the drawbacks of carbon credits 2 to 3 years ago. The following statements will provide readers' views on how we should treat carbon credits and carbon offsets fairly.
Myth#1 Not Prioritize Behavioral Change In Life
Unlike businesses, individual actions are unpredictable with different preferences and cultures. When we advocate individual climate action, respecting others’ preferences with reversible climate action would invite more people to join the movement. At Optivide, we look into 3 measures when evaluating individual behavioral change
- Emission: To achieve the same purpose, how much emission will this activity produce?
- Frequency: To achieve the same purpose, how many times would this activity happen?
- Necessary: To achieve the same purpose, is this activity necessary after considering all possible solutions?
Combined with each individual situation and limitations, we could customize our behavioral change advice to our users with our service.
Myth#2 Carbon Offset and Carbon Financing
Carbon offset happens when users retire 1 unit of carbon credit. When retired, this specific carbon credit cannot be traded on the market. Carbon financing describes funding to the carbon credit project development, depending on the type of project, the carbon credit may take 1-3 years to receive the verification from standard bodies.
Myth#3 Not Comply with Verification Standards
Currently, most carbon credits traded on the exchange platform comply with verification standards. Some big registries, such as Verra, Gold Standard, and Puro, are international majors. Others, such as Plan Vivo, BioCarbon, CERCABONO, Hemp Carbon Standard, Climate Action Reserve, and more, are newcomers who might provide new methodologies and perspectives. For the rest who design their own methodology without verification standards, it is hard for stakeholders to understand the quality of the projects. Like many other things in our lives, there are many dimensions to evaluate the quality of carbon credit projects. However, when it comes to communicating the values and benefits, following a standardized verification procedure helps build market trust.
Myth#4 Not Consider the Net Positive Impact
Several international organizations govern the quality of carbon credit projects, such as ICROA, the Carbon Credit Quality Initiative(CCQI), VCMI, and the ICVCM Core Carbon Principles. Common principles include financial additionality, credit permanence, digital MRV, co-benefits, externalities, no double counting, and independent third-party validation. All the information above will help stakeholders evaluate their net positive impacts on our planet and people.
Myth#5 Not Offset All Carbon Credit in the Markets
To accelerate the net-zero goal, we need more funding towards a primary market where the funding directly contributes to the development of carbon credit projects. The more a carbon credit circulates in the market, the lower its positive impact. However, the secondary market helps discover the price and foster the transaction liquidity. It builds market trust with transparent information. In recent years, more companies have been using rolling vintage years as one of their carbon credit quality selection criteria. This might help mitigate the circulation discount.