IN GENERAL
How a carbon credit standard works
A carbon credit standard is a set of rules and criteria established by a carbon offset program that defines how a project can generate carbon credits. These standards are essential to ensure the integrity and credibility of the carbon market by ensuring that emissions reductions are real, additional, and permanent.
The development process of a standard involves clearly defining the requirements for a project to be eligible to generate credits. This includes project selection criteria, emission calculation methodologies, monitoring, reporting, and verification requirements, as well as mechanisms for ensuring additionality, meaning that the emission reductions are additional to those that would occur without the project.
After the development of the standard, projects undergo a rigorous audit and certification process. Independent auditors verify if the project is being implemented according to the standard and if the emissions reductions are being calculated and reported correctly. If the project is approved, the certifying entity issues the carbon credits, which can be traded in the market.
To ensure transparency and traceability of the credits, systems for registration and tracking are implemented, following the generation, transfer, and retirement of credits.
In summary, a carbon credit standard is crucial for ensuring the quality and credibility of the credits generated. By establishing clear and transparent rules, the standards foster trust in the carbon market and drive the implementation of projects that help mitigate climate change.