Watchdog organization Carbon Market Watch has just published a report that compares four of the major carbon credit rating agencies.
The comparison is significant due to the fact that there is currently no standardized, universally accepted assessment methodology for carbon credit quality.
As is becoming increasingly obvious, particularly in the light of recent scandals surrounding faulty carbon credits and subpar offset schemes, there is a tremendous need for such standardization and robust methodologies to help bring more transparency to the voluntary carbon market (VCM).
Carbon credit rating agencies are hard at work developing such standards and methodologies to come up with comprehensive ratings, but as these ratings may differ significantly from one another, the report by Carbon Market Watch provides a unique comparison of each agency’ approach and highlights some of their main differences.
For example, what Renoster does differently compared to most others is it tries to limit its qualitative assessment and relies more on an algorithmic analysis.
Another aspect of its approach that sets Renoster apart from the other agencies is that its tests tend to be mostly implicit, as opposed to the direct tests used by most of the others for their assessments.
Other important differences included in the report focus on how agencies deal with such factors as additionality, double issuance, double counting, co-benefits, permanence benchmarks, leakage, and others.