WWF, the World Wide Fund for Nature, just released a report on standards in the carbon offset industry. The report’s full title is “A Comparison of Carbon Offset Standards - Making Sense of the Voluntary Carbon Market”. You can download the PDF here (3 Mb).

Carbon is often described as the world’s most complex commodity. A tonne of carbon is nothing like a barrel of oil or a bushel of wheat. It’s a promise to prevent emissions that would otherwise have taken place. But you can’t see or smell a carbon emission, and who knows the answer to “what if”? As a purchaser of offsets, how can you make sure you’re buying the real deal?

While in theory it’s possible to evaluate offsets, it’s no cakewalk. A standard makes life easier by letting you rely on the expertise of the best. Think of it this way: if your doctor has a degree from Harvard, would you check if he knows an elbow from a knee?

The report suggests 3 standards will dominate in the coming years:

• The Clean Development Mechanism. The CDM was designed to help developed countries reach their reduction targets under the Kyoto Protocol via carbon offsetting. Projects are located in developing countries such as Brazil, China and India. CDM projects have strict guidelines and must be approved by an independent body.

• The (CDM) Gold Standard. This started out as an extra quality mark for CDM projects, with a focus on side benefits such as employment and energy efficiency. It has recently been extended for non-CDM projects, providing independent verification against a strict set of criteria.

• The Voluntary Carbon Standard. The VCS is a more recent standard developed specifically for the voluntary carbon market. It aims to provide a basic level of quality without adding too much to the price. By contrast, CDM and Gold Standard projects tend to be expensive due to the extra layers of bureaucracy involved.

If you want the whole story, the full report (while long) is highly recommended. It analyzes 5 offset standards and 7 related initiatives in great detail. Even better, its background and commentary cover many other issues in the offset market.

Standards will be of great value for carbon offsetting, but it will take time for their presence to be felt. Out of 250 projects currently listed in Carbon Catalog, 25 have qualified under the CDM, 5 under the Gold Standard, and just 4 under the VCS. We look forward to seeing these numbers grow.