What makes a carbon credit trustworthy?

Five ideas decide whether a credit represents a real tonne.

Additionality

A project is additional if the emission reduction or removal would not have happened without the money from carbon credits. If a factory was going to install efficient boilers anyway because they save money, selling credits for it adds nothing for the climate.

Baseline

The baseline is the "what would have happened otherwise" scenario. Credits are calculated as the difference between baseline emissions and actual project emissions. An inflated baseline produces too many credits.

Illustrative example (invented numbers, not a real project): a methodology estimates that, without the project, a landfill would release methane equal to 50,000 tCO2e in a year. Monitoring shows the project destroyed enough methane that the site's emissions were 12,000 tCO2e. The methodology also requires a 2,000 tCO2e deduction for leakage and uncertainty. Credits issued = 50,000 − 12,000 − 2,000 = 36,000 credits. If the baseline had been overstated at 60,000, the project would have received 10,000 credits that represent nothing real.

Permanence

Permanence means the stored carbon stays stored. This is a key question for forest and soil credits. Standards handle it in different ways, for example by holding back a share of credits in a "buffer pool" that is cancelled if a reversal happens, or by requiring long monitoring periods.

Leakage

Leakage happens when a project simply moves emissions somewhere else. Protecting one forest may push logging into the next valley. Good methodologies estimate leakage and deduct it.

Double counting

The same tonne must not be claimed twice. This can happen if one credit is sold to two buyers (double selling), if it is not retired after use (double use), or if both a buyer company and the host country count the same reduction toward their targets (double claiming). Registries and Article 6 "corresponding adjustments" exist to prevent this.