The first step in evaluating carbon offsets is to look at the organization or company which is selling them. Here are some questions to think about when considering an offset provider:
Additionality - Would the project have happened without funding from offsets?
A carbon offset project must cause a reduction in carbon emissions that would not have occurred if the offset had not been bought. For example, helping a factory become more efficient does not qualify if the project would already pay for itself by lowering energy bills. Similarly, if the laws in a country require a project to be carried out, that project is not a valid recipient of funds from carbon offsets.
Permanence - Is it possible for the project's effects to be reversed?
Some carbon offset projects aim to absorb carbon dioxide from the atmosphere and store it in the ground. Unless this storage is permanent and secure, the carbon dioxide may escape back into the atmosphere later, leaving nothing achieved. This issue is particularly relevant for reforestation offsets, since it is hard to predict how long trees will remain standing before they are felled or burnt.
Leakage - Will the project cause more emissions to take place elsewhere?
Greenhouse gases circulate freely in the Earth's atmosphere. Therefore it is pointless to reduce emissions in one place if this causes an equal increase elsewhere. For example, if a factory with high emissions is closed down, this may result in a similar factory elsewhere ramping up production to meet demand.
Baseline - What emissions will occur if the project is not carried out?
Carbon offsets are quantified by the reduction in carbon dioxide emissions, relative to a baseline. The baseline is an estimate of the quantity that will be emitted if the project is not carried out. It is essential that this baseline is estimated accurately, preferably based on prior measurement or similar sites.
Measurement - How are the post-project emissions being measured?
After a project is complete, it is important to measure the quantity of greenhouse gases still emitted. This amount is subtracted from the baseline (see above) to confirm the predicted reduction.
Verification - Will the project be verified by an independent third party?
Because of the potential for mistakes or fraud, carbon offset projects should be verified by a qualified and independent third party. This helps avoid a conflict between the financial interests of the project's provider, and the project's environmental goals.
Certification - Has the project been certified under one of the formal standards?
Several formal standards of certification have been developed to help address these issues. The Voluntary Carbon Standard aims to set a basic quality threshold for all projects. Projects which qualify for the Kyoto Clean Development Mechanism must fulfill stricter criteria, which the Gold Standard takes further still.