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New CCQI scores show that hydropower carbon market projects face several environmental integrity issues.
The Carbon Credit Quality Initiative (CCQI) released new scores for the project type hydropower today, covering the subtypes hydropower dam and hydropower run-of-river. Hydropower projects make up about 11% of recent credit issuances. The assessments reveal substantial risks regarding additionality, estimation of emission reductions, and impacts on sustainable development.
Key insights from CCQI's analysis are:
Large-scale hydropower projects are unlikely to be additional. Usually, countries incorporate large-scale hydropower plants in their long-term planning processes, which take factors like energy security concerns or irrigation policy into account. It is unlikely that carbon credit revenues substantially influence these planning processes.
Greenhouse gas emission reductions from hydropower power plants are likely to be overestimated. This is due to several methodological issues in the determination of the grid emission factor and the estimation of emissions from hydro reservoirs.
Hydropower dams can have negative impacts on several Sustainable Development Goals. They can degrade natural habitats and disrupt ecosystems (SDG 15), lead to displacement of surrounding communities (SDG 1) and reduce food security (SDG 2).
The CCQI analyses can help crediting programs improve on delivering the climate and sustainable development benefits and assist carbon credit buyers with understanding and managing risks associated with their investments. The CCQI continuously expands its scorings to assess more project types and carbon crediting programs.
To contribute to achieving the Paris Climate Agreement and the Sustainable Development Goals, carbon credits in the voluntary carbon market need to be of high quality. Transparent information on the quality of carbon credits from different types of projects can help align the market toward higher quality and toward a better implementation of the 2030 Agenda, leading to more financing for climate action.
Today the Carbon Credit Quality Initiative (CCQI) published factsheets on six project types. These factsheets, prepared for the Foundation Development and Climate Alliance, synthesize CCQI's research results for different project types in a comprehensible, easily accessible way for the interested public. Until now, users have only been able to compare different quality criteria through our interactive scoring tool. The factsheets are an alternative resource that concisely summarize information on different carbon credit types.
"The factsheets are a tool for stakeholders to learn about project types and make qualified decisions," says Peter Renner, Chairman of the Board of Directors of the Foundation Development and Climate Alliance. "The project is a science-based project on communication, which is of particular importance to us as a foundation and with which we provide an overview of the quality characteristics and risks of common types of projects", says Dr Olivia Henke, Executive Board of the Foundation Development and Climate Alliance.
CCQI was founded and is managed by Environmental Defense Fund (EDF), World Wildlife Fund (WWF-US) and Oeko-Institut, a leading European research and consultancy institution working for a sustainable future. Scores published by CCQI are derived from applying the CCQI assessment methodology. The assessment is led by Oeko-Institut, with support from experienced carbon market experts from Carbon Limits, Greenhouse Gas Management Institute (GHGMI), INFRAS and Stockholm Environment Institute (SEI).
"The aim of CCQI is to provide market participants and the interested public with a way to better understand quality differences in carbon credits," says Dr. Lambert Schneider, Research Coordinator for International Climate Policy at Oeko-Institut. With this aim in mind, the participating institutions developed a methodology to assess various quality features, using a catalog of criteria.
The factsheets present CCQI's results for different project types along the relevant quality objectives, which include additionality, robust quantification of emission reductions, ensuring permanence, compatibility of projects with achieving net zero emissions, contribution to sustainable development, and, where relevant, double issuance of carbon credits due to indirect overlap between projects.
The first six factsheets can be found here.
As part of our mission to enhance the quality of carbon credits, the Carbon Credit Quality Initiative (CCQI) aims to leverage our assessments to inform and improve carbon crediting program rules and methodologies. To this end, CCQI submitted comments to Verra's public consultation on the methodology VMR0006 for installation of high efficiency firewood cookstoves. Our full comments can be found here. Information about the consultation and the proposed revisions to the methodology can be found on Verra's website here.
The Carbon Credit Quality Initiative (CCQI) joined the captivating debates at North American Carbon World (NACW) this year, engaging in key discussions around carbon credit quality and the future of the voluntary carbon market. John Holler, Senior Program Officer, Climate Cooperation & Sustainable Fuels, World Wildlife Fund – US, and Pedro Martins Barata, Associate Vice President for Carbon Markets and Private Sector Decarbonization at Environmental Defense Fund, both represented CCQI and spoke on engaging panels:
With guidance on quality and integrity being a key focus of this year's NACW, the engaging discussions and events called attention to the future of the carbon market. As CCQI prepares to release new quality scores this year, market stakeholders will soon have more clarity and resources than ever to strive for high quality and high integrity.
31 January, 2023 — The Carbon Credit Quality Initiative (CCQI) launched an expanded version of its interactive scoring tool to assess the quality of several newly added types of carbon credits. The new CCQI scores reveal that the majority of carbon credit types assessed are low in quality in one or more criteria, and underscore the need to improve the quality of carbon credits in the market.
Led by Environmental Defense Fund, World Wildlife Fund (WWF-US), and Oeko-Institut, CCQI offers free resources, including its robust assessment methodology and interactive scoring tool, to support carbon market stakeholders in understanding which carbon credits are more likely to deliver actual emission reductions as well as social and environmental benefits. With these new scores, CCQI's scoring tool now covers over a quarter of the voluntary carbon market.
“CCQI sets a high bar for quality—and our scores show that all carbon credit types that we've assessed have notable concerns in some quality aspects, whether that pertains to additionality, the robustness of emission reduction calculations, or other aspects of carbon credit quality,” said Pedro Martins Barata, Associate Vice President for Carbon Markets at Environmental Defense Fund. “This should be a signal to carbon market stakeholders and buyers who want to see their investments return positive impacts to do their due diligence, and to carbon crediting programs to up their game.”
The new set of scores released by CCQI assesses the quality of the following credit types:
Industrial biodigesters fed with livestock manure
Leak repair in natural gas transmission and distribution systems
Recovery of associated gas from oil fields
Solar photovoltaic power
Wind power (onshore)
CCQI scores a given carbon credit type on an interval scale of one through five against several quality objectives, such as robust determination of the emissions impact or environmental and social safeguards. This allows buyers to understand the nuances and trade-offs in the quality of carbon credit types, make an informed decision, and focus their due diligence where it's likely to be needed most.
The expanded CCQI scorings show that carbon credit types often perform well in some areas, but poorly in others. Many carbon credit types face serious shortcomings in their methodology of quantifying emission reductions, for example, with a high risk of overestimating reductions.
“There are serious problems with how some methodologies estimate emissions reductions. This is not good news at a time when demand for carbon credits is increasing,” said Lambert Schneider, Research Coordinator for International Climate Policy at Oeko-Institut. "The good news is that we also found good practice and innovative approaches. The quality of carbon credits could be improved quite a bit if all carbon crediting programs would adopt the most robust approaches from their peers. For carbon credits to play a meaningful role in financing climate action, the rules of carbon crediting programs need to become more robust."
The new scores also reveal that:
Most methodologies assessed either overestimate emissions reductions, or there is large uncertainty. This is an issue that affects project types regardless of their performance in other areas. For example, project types that deploy efficient cookstoves in rural areas generally had favorable additionality assessments, but risk significantly overestimating emissions reductions. Changes to these methodological approaches would significantly reduce this risk and uncertainty.
Renewable energy projects – specifically solar PV and onshore wind – score poorly on additionality, meaning that these project types are likely to be profitable without the added incentive of revenues from carbon credits. By contrast, in the case of industrial biodigesters or landfill gas utilization projects, carbon credit revenues often make a true difference, enabling these project types to become economically viable.
Across programs and project types, credits that are paired with a complementary standard – like Verra's Climate, Community & Biodiversity (CCB) Standards and Sustainable Development Verified Impact Standard (SD VISta) – score higher on environmental and social safeguards.
Insights derived from these and future assessments under CCQI are aimed to help crediting programs improve on delivering the climate benefits they promise and to assist buyers with understanding and managing risks associated with their investments and claims.
CCQI will expand its scoring tool to assess more project types and programs, allowing users to discover how other project types and programs perform on quality. CCQI aims to cover over 80 percent of the current voluntary carbon market by the end of 2023.
For more information, visit www.carboncreditquality.org.
CCQI is mentioned in Reuters coverage of COP27 in Sharm El-Sheikh Egypt, where we hosted an event on carbon credit quality. Read the full article here.
In the race toward quality, CCQI is here to help keep companies, carbon credit developers, and all market participants racing in the right direction.
A recent GreenBiz Group article featuring CCQI affirms, "Offset integrity must become the top priority for companies to ethically leverage the convenience of the voluntary carbon market." Read the full article here
Learn how CCQI aims to move the carbon market toward quality, how users can explore our tool to assess carbon credit types, and what's next for CCQI.
To read the full article, visit: https://lnkd.in/egnbSetG
Carbon Credit Quality Initiative (CCQI) released transparent scorings for three carbon credit types to help enhance the quality of credits being transacted in the market
31 May, 2022 — The Carbon Credit Quality Initiative (CCQI) launched a new interactive tool to score the quality of several types of carbon credits. The free online CCQI Scoring Tool enables buyers in the growing carbon credit market to make more informed decisions and ultimately aims to improve the quality of credits transacting in the market.
Led by Environmental Defense Fund, World Wildlife Fund (WWF-US), and Oeko-Institut, CCQI offers free resources, including its robust assessment methodology and interactive scoring tool, to support carbon credit buyers who seek the highest possible quality as well as to build broader public understanding of which credits deliver the greatest climate mitigation impact. The tool is now available at www.carboncreditquality.org.
The first set of scores released by CCQI assesses the quality of three carbon credit project types (landfill gas utilization, establishment of natural forests and efficient cookstoves) under four carbon crediting programs (the Clean Development Mechanism, Climate Action Reserve, Gold Standard and the Verified Carbon Standard operated by Verra).
The first round of CCQI scorings show that carbon credits often perform well in some areas but poorly in others. Efficient cookstove projects, for example, face serious shortcomings in quantifying emission reductions and addressing non-permanence but often generate high environmental and social benefits.
"CCQIs first round of scoring confirmed that there is both wheat and chaff in the carbon credit market. The important thing, however, is that the consumer can tell the difference," said Pedro Martins Barata, Senior Director of Climate at Environmental Defense Fund. "Free, transparent resources like our Scoring Tool can move the market toward quality by helping users understand what quality means for carbon credits." Carbon credits are in high demand from buyers aiming to meet their voluntary climate commitments and compliance obligations under emissions trading schemes and carbon tax policies.
"When buyers come to the carbon credit market, they are sometimes surprised that detailed guidance on how to evaluate credits is not publicly available," said Brad Schallert, WWF's director of carbon market governance and aviation. "CCQI hopes to fill this information gap by offering our scoring tool as one of several steps a buyer takes when conducting due diligence on how credits might differ in quality."
Carbon credits are assessed using CCQIs methodology, which scores a given carbon credit on an interval scale of one through five against several quality objectives, listed below. This allows buyers to understand the nuances and trade-offs in the quality of carbon credits and make an informed decision.
For instance, the CCQI scores reveal considerable differences between carbon crediting programs. For example, the Clean Development Mechanism was found to have the best third-party auditing rules, the Climate Action Reserve performed best in its approach for compensating for potential non-permanence, the Gold Standard was found to have the most comprehensive environmental and social safeguards, and the Verified Carbon Standard performed high in its governance, transparency and its approaches for reducing non-permanence risks.
"What makes a high-quality carbon credit is a complex question," said Lambert Schneider, Research Coordinator for International Climate Policy at Oeko-Institut. "We designed our Scoring Tool so that users could have a nuanced 360-degree view of different quality features of carbon credits. The scorings show a mixed performance of carbon crediting programs. If all carbon crediting programs would adopt the best practice approaches from their peers, however, this would be an important step forward in addressing the quality problems currently faced in the market."
CCQIs quality objectives include:
CCQI will expand its Scoring Tool to assess more project types and programs, allowing users to discover how other project types and programs perform on quality and cover a larger share of the current market. The next round of scores will be released later by the end of 2022.
As the article highlights, "The initiative aims to help carbon credit buyers make more informed decisions – something they hope will drive an improvement in the quality of credits transacted in the voluntary carbon market... [CCQI] is set apart from other similar initiatives because of its financial independence and unlikelihood of any conflict-of-interests making its way into the ratings."
Check out the full article here: https://carbon-pulse.com/161150/