SAMSIDdHA

Tarak Dhurjati

1️⃣ Introduction

Carbon credits are tradable certificates representing the removal, reduction, or avoidance of one metric ton of CO₂-equivalent (tCO₂e). They are designed to incentivize climate mitigation by rewarding projects that verifiably reduce atmospheric greenhouse gas (GHG) concentrations.

Credits can be:

• Avoidance / Reduction-based: Preventing emissions that would have occurred (e.g., renewable energy, efficient cookstoves, AWD irrigation in rice).
• Sequestration / Removal-based: Capturing and storing CO₂ either biologically (e.g., mangroves, soil carbon) or technically (e.g., Direct Air Capture, Enhanced Rock Weathering).

2️⃣ Classification of Carbon Credit Projects

3️⃣ Measurement of Carbon Credits (MRV Framework)

All credible programs follow MRV – Measurement, Reporting, and Verification protocols that include:

1. Baseline Estimation:
   Define the “business-as-usual” (BAU) scenario—what emissions would occur without the project.
   Example: For AWD rice, baseline = continuous flooding with higher methane emissions.
2. Quantification of Reductions/Removals:
   Apply standardized formulas or direct measurement tools.
   • Mangroves: Biomass sampling + remote sensing for soil carbon.
   • ERW: Quantify weathering rate, CO₂ mineralized, and life-cycle energy use.
3. Leakage Assessment:
   Determine if emissions are displaced elsewhere (e.g., protecting one mangrove area causes cutting in another).
4. Additionality:
   Demonstrate the project would not have happened without carbon finance (financial, regulatory, or common practice tests).
5. Permanence:
   Assess risk of reversal (fires, erosion, dissolution). Manage via buffer pools or insurance (esp. for mangroves, forests).
6. Monitoring & Verification:
   Regular data collection (field, satellite, sensors) and third-party verification at defined intervals (1–5 years).

4️⃣ Major Standards & Registries

5️⃣ Types of Audits and Assurance Levels

1. Validation Audit (Pre-implementation)
Conducted before project registration to assess methodology, baseline, and additionality.

2. Verification Audit (Ex-post)
Independent review of monitoring data to confirm actual emission reductions/removals.

3. Surveillance / Follow-up Audits
Interim checks to ensure ongoing compliance.

4. Assurance Levels:

• Reasonable Assurance: Deep sampling, field visits, high confidence.
• Limited Assurance: Desk review, smaller samples, lower confidence (used for pilot projects).

Audit Accreditation:
Auditors (Validation & Verification Bodies or VVBs) must be ISO 14065 accredited or approved by the registry.

6️⃣ Project-Specific MRV Challenges

7️⃣ Audit Protocols: What Verifiers Check

✅ Conformance to approved methodology
✅ Evidence of baseline and monitoring data
✅ Additionality and leakage justification
✅ Calculation of uncertainties and conservative buffers
✅ Permanence safeguards and buffer pool contributions
✅ Public documentation and traceability (serial numbers, registry link)

8️⃣ Process Flow — From Project to Monetization

Project Concept → Methodology Selection → Project Design Document (PDD)
      ↓
Third-party Validation (VVB)
      ↓
Project Implementation & Data Monitoring
      ↓
Verification Audit (Ex-post)
      ↓
Registry Issuance of Credits (VCUs, CORCs, etc.)
      ↓
Listing or Sale via Exchange / OTC Market
      ↓
Buyer Retirement and Corporate Disclosure

(Puro.earth credits are issued as CORCs; Verra/Gold Standard issue VCUs or GS VERs.)

9️⃣ Critical Review — Key Insights

👍 Strengths

• Established global frameworks (VCS, Gold Standard, ACR, Puro.earth) ensure methodological transparency and MRV traceability.
• Growing inclusion of agricultural innovations (DSR, AWD) and durable removals (ERW, biochar) enhances portfolio diversity.
• Puro.earth adds scientific rigor for permanent removals, avoiding issues common in nature-based credit reversibility.

⚠️ Weaknesses

• Baseline inflation and weak additionality remain systemic issues.
• Permanence risk in biological systems (mangroves, forests) undermines long-term value.
• Audit inconsistency—varying depth and independence of VVBs.
• Data transparency gaps—not all registries make field data public.
• Low farmer-level incentives—especially in DSR/AWD projects, where monitoring costs exceed credit value unless aggregated.

💡 Emerging Best Practices

• Combining satellite data + IoT sensors for real-time MRV.
• Linking digital MRV systems (e.g., Puro Connect, Verra’s Project Tracker).
• Adoption of ISO 14064-3 verification consistency.
• Using buffer pools or insurance to de-risk natural projects.
• LCA integration in engineered removals (ERW, DAC).

🔟 Conclusion

High-quality carbon credits require:

1. Transparent methodologies,
2. Independent, accredited audits,
3. Robust MRV frameworks, and
4. Conservative accounting for risk and uncertainty.

Among registries, Puro.earth stands out for durable carbon removal projects, while Verra, Gold Standard, and ACR remain critical for agriculture and ecosystem-based credits such as DSR, AWD, and mangrove restoration.

The credibility of the carbon market hinges not only on carbon quantity but on carbon integrity—ensuring that every credit represents a real, additional, and permanent tonne of CO₂ removed or avoided.

By Tarak Dhurjati-

AI Tools were used for developing the above article.