Carbon Offset Standards–Look How Far We've Come

Kathryn Thomsen, The Climate Trust
As published by Sustainable Business Oregon – October 27, 2014

The Merriam-Webster online dictionary has a long list of definitions for “standard,” making it quite diverse in meaning. Definitions call out fruit trees, flags, behavior, and quality among others. A couple of the more interesting examples are: “a fruit tree grafted on a stock that does not induce dwarfing,” or “ideas about morally correct and acceptable behavior.” One definition that is less a topic for dinner conversation, but more relevant for this discussion is, “a level of quality, achievement, etc., that is considered or desirable.”

In the carbon market, offset standards form a framework for developing, measuring, and verifying greenhouse gas emission reduction activities, and provide guidance on how these should be achieved. Under the offset standard’s umbrella, guidelines provide a consistent way to quantify carbon emission reductions, and criteria for assessing and verifying eligibility, validity, and quality of the project.

Recently, I started thinking about the evolution of domestic carbon offset standards and how far we’ve come in just 10 years. There were many policy experts, academics, and stakeholders—both domestic and international—who contributed over the years, and continue to develop and refine the existing carbon offset standards and guidance protocols governing these projects. To keep this discussion manageable, our story presents one narrow slice—how the application of carbon offset standards have evolved and how these are currently applied towards projects developed and acquired on behalf of the Oregon CO₂ Standard (The Standard).

Oregon adopted the first national carbon dioxide standard in 1997, designed to reduce greenhouse gas emissions from new power plants in the state. The Standard requires new power plants in Oregon to reduce their net emissions below the level of the best existing gas combustion-turbine plant anywhere in the United States. Facilities can comply with The Standard by choosing from these options: (1) Investing directly in on-site carbon emission reductions; (2) Funding and developing emission reduction projects; or (3) Providing funding to a state-recognized nonprofit responsible for selecting and managing emission reduction projects—carbon offsets—on their behalf.

The Climate Trust is the only nonprofit qualified to administer the Oregon Standard. Since 1999, The Trust has leveraged funding received as a result of The Standard to contract for nearly three million metric tons of carbon offsets for a wide range of projects including energy efficiency, renewable energy, carpooling, materials substitution, forestry, and more recently organic waste, agricultural, and other land-based projects. Throughout this period our work has also expanded to administer similar offset standards in Washington, Colorado, Montana, and Massachusetts.

Many of The Climate Trust’s early carbon offset projects pre-dated the domestic market standards and project methodologies which are currently available on voluntary public registries such as Climate Action Reserve (CAR), American Carbon Registry (ACR), and Verified Carbon Standard (VCS).

To provide a standardized framework for these early projects—in the absence of these publicly vetted standards and protocols—The Trust developed monitoring and evaluation (M&V) plans which relied on offset project methodologies and guidance documents developed internationally as a result of the Kyoto Protocol’s Clean Development Mechanism (CDM). Many of these international methodologies were also adopted for domestic use (or vice versa) by some the same policy experts and stakeholders responsible for developing offset standards, and founding these public registries.

An example of one of the Trust’s early projects is Oregon State University’s (OSU) cogeneration project. This project resulted in installation of a Combined Heat and Power plant to provide electricity and steam heat to the campus; thereby avoiding use of grid power. The M&V plan was developed following CDM’s AM0014: Natural gas-based packaged cogeneration. The annual emission reductions for the OSU cogeneration project are verified and certified under this M&V framework.

Fast forward several years and offset projects in The Trust’s portfolio are verified according to M&V plans, and certified under domestic carbon offset standards made available through the public registries—CAR, ACR, and VCS. For example, Farm Power Northwest’s biogas digester projects, several of which are located in Washington and Oregon, are verified and certified to CAR’s Livestock Project Protocol. Delta Institute’s nutrient management project, a pilot to enroll landowners in the Midwestern U.S. in soil management best practices, is certified using ACR’s methodology for emission reductions from reduced use of nitrogen fertilizer. Another of The Trust’s more recent offset project acquisitions is the Afognak Forest Conservation project in Alaska, verified against the VCS Improved Forest Management protocol.

Today’s domestic carbon offset standards and offset project protocols still may not be a topic well-suited for dinner conversation, however, it is important to note that they have evolved to a new level of transparency through a process of stakeholder peer-review and public reporting. Although standards and protocols do not ensure all offset projects are deemed equal in the carbon market, they provide a consistent method for quantifying emission reductions, a publicly agreed approach for assessing offset eligibility and quality, and a framework for certifying a project. Personally, we can’t wait to see what the next 10 years brings.