Carbon Market Standards

A carbon market methodology defines a standard set of parameters, criteria, and operations required for the calculation of emission reductions or removals from a carbon project during its lifetime. Carbon project developers can either use pre-existing methodologies or develop new ones.

Baselines, additionality, and leakage are key concepts in carbon market methodologies:

  • The baseline scenario represents the level of emissions or removals of greenhouse gases without the project.
  • Additionality is the reduction in emissions or increase in removals caused by the mitigation activity or activities promoted by the project, which are additional to the baseline scenario.
  • Leakage is defined by the emissions that occur outside project boundaries as a consequence of the implementation of the project activities, which need to be accounted for.

In addition to the major organizations in the sidebar with standards and methodologies developed for voluntary carbon offset programs in agriculture, there are also:

  • American Carbon Registry: manage standards outlining the eligibility requirements for registration of project-based carbon offsets. ACR is an approved Offset Project Registry for the California Cap-and-Trade Program.
  • Climate Action Reserve: the Climate Action Reserve (CAR) establishes standards for quantifying and verifying reductions of GHG emissions from projects implemented within North America.
  • Australia’s Emission Reduction Fund: a voluntary scheme with the objective to provide incentives for the implementation of practices and technologies to reduce emissions and promote carbon sequestration in Australia.
  • Nori: carbon offset project standard for generating carbon credits from changes in soil management and crop production practices at farm-scale (US only). Once verified, Nori issues a carbon removal certificate (CRC) that exists on the blockchain.
  • UNFCCC mechanisms:
    • CDM: The Clean Development Mechanism (CDM) allows projects in developing countries to generate certified emission reduction (CER) credits. CERs can be commercialized (traded and sold) and used to offset emissions from industrialized countries under the Kyoto Protocol.
    • Article 6 of the Paris Agreement: basically provides a framework for the creation of an international carbon market, with the aim to support the implementation of the Paris Agreement. This new global carbon market could potentially replace the Clean Development Mechanism (CDM), however, all rules under Article 6 remain under negotiation.