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Carbon Credit Attributes

Quality carbon credits are defined by several attributes. We will look at a potential avoided deforestation project to illustrate these.

Additionality

The project backing the carbon credits must represent a change to the business as usual scenario that would not have happened were it not for the carbon credits themselves.
If a landowner had no plans to cut down forest, she cannot issue carbon credits for that forest. However, if she was originally scheduled to cut down the forest and sell the timber, but decided against it due to the revenue that she could receive from the credits, those credits are additional.

Permanence

The project must represent a permanent removal or reduction of carbon.
If the landowner just delays his deforestation project a year, the credits generated from the original decision to not cut down his forest would not be permanent.

Leakage

Leakage is one of the more difficult attributes to account for. It states that a carbon reduction action in one area should not result in an equivalent or additional carbon emission action in another area.
Say credits were generated from our landowner's avoided deforestation at site A. If the landowner then goes and cuts down forest at site B she had originally planned to keep standing, the credits from site A would have leakage.

Measurable and Verified

The carbon avoided or reduced from the project must be accurately estimated and monitored throughout the project life. A third-party should be responsible for all estimations to reduce bias. All projects should be registered with a respected body to ensure integrity.

Do No Harm

Carbon credit projects should not result in societal or environmental harm. Examples of a potential harm caused could be the displacement of an indigenous community or the planting of an invasive species in a habitat.