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What is Carbon Offset Watch?

Carbon Offset Watch is the first independent ranking of Australian offset providers. Completed in August 2008, information and products can change - please check for new information from providers and use our tips for buying offsets.

Total Environment Centre
the Institute for Sustainable Futures
choice
Offset Standards PDF Print E-mail

During the Carbon Offset Watch assessment period (1 November 2007 to 30 April 2008), participants in the assessment sold voluntary carbon credits generated under the following independent schemes and standards: CDM, GGAS, Gold Standard, Greenhouse Friendly, Australia’s Mandatory Renewable Energy Target (MRET), VER+ and the Voluntary Carbon Standard (VCS).  We ranked (in descending order) these according to a range of attributes (see full report):

          1. CDM and Gold Standard
          2. VCS, VER+ and Greenhouse Friendly
          3. GGAS non-forestry
          4. GGAS forestry
          5. MRET

Although Greenhouse Friendly performed well in the assessment relative to other Australian standards, it would not be sufficient for the Rudd Government to simply adopt it as the de facto national standard. This is because, as discussed further below, it does not incorporate all aspects of the voluntary carbon market, such as requirements for carbon footprint calculators and acquittal of offsets.

Below is a brief description of each offset accreditation standard:

  • The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) sets limits for the greenhouse gas emissions of a group of developed countries. This has created an international market for traded carbon credits. The Clean Development Mechanism (CDM), a carbon offset program administered by the UNFCCC, allows accredited projects to generate credits that can be sold to meet obligations under the Kyoto protocol. While CDM credits are generally sold to entities with regulatory requirements to meet reduction targets, project developers may also sell credits into the voluntary market.
  • The NSW Greenhouse Gas Reduction Scheme (GGAS) is a mandatory scheme, started in 2003, that aims to reduce greenhouse gas emissions associated with the production and use of electricity in NSW. The ACT Government introduced a Greenhouse Gas Reduction Scheme in 2005 that mirrors the NSW scheme. Under these schemes, electricity retailers and certain other parties who buy or sell electricity in NSW and the ACT are required to meet mandatory greenhouse gas reduction benchmarks based on their share of the electricity market. They can do so by buying Greenhouse Gas Abatement Certificates (GGACs) generated through abatement projects. GGAS was one of the first mandatory greenhouse gas reduction schemes in the world . GGACs generated under GGAS can alternatively be sold in the voluntary market. GGAS will end when a national emissions trading scheme begins.
  • The Gold Standard is a carbon offset standard that certifies compliance credits created through the CDM and voluntary carbon credits. It was developed by WWF in conjunction with NGOs, governments and industry participants. It is administered by Gold Standard administrative bodies. The standard excludes forestry and land use (sequestration) projects. It emphasises the sustainable development benefits of carbon offset projects, beyond the reduction of greenhouse gas emissions.
  • Greenhouse Friendly is an Australian Government scheme for voluntary carbon offsets, administered by the Australian Government’s Department of Climate Change. Greenhouse Friendly provides two services: it certifies products as “carbon neutral”; and, it certifies carbon offsets generated by certified Greenhouse Friendly Abatement Providers.
  • Voluntary Carbon Standard (VCS) is a carbon offset standard that was founded by the Climate Group, the International Emissions Trading Association (IETA) and the World Business Council for Sustainable Development (WBCSD) in 2007 following widespread consultation with industry stakeholders. The World Economic Forum also partnered in its development. It is administered by VCS administrative bodies. Credits certified under the VCS are traded in the voluntary market as Voluntary Carbon Units (VCUs).
  • VER+, launched in 2007 is a carbon offset standard that closely follows CDM processes. Like VCS, it focuses on greenhouse gas reductions and does not require co-benefits. It was developed and is administered by TUV SUD, a Designated Operational Entity, which is an independent entity, accredited under CDM to independently verify CDM projects and emission reductions. Credits certified under VER+ are traded in the voluntary market.
  • Mandatory Renewable Energy Target and Renewable Energy (Electricity) Act 2000: In 2001, the Australian Government introduced a Mandatory Renewable Energy Target (MRET) scheme that aims to increase the uptake of renewable energy in Australia’s electricity supply. MRET is implemented through the Renewable Energy (Electricity) Act 2000. Under the Act, owners (or operators) of eligible renewable power stations, solar hot water installations, and small generation units (such as photovoltaic cells) are eligible to claim tradable RECs for each megawatt hour of renewable electricity generated according to the rules of the scheme.