The Reserve takes into consideration a number of issues when assessing a project type for protocol development, including those listed below. Although a prospective project type does not necessarily need to fully satisfy all of these criteria, it should be a good “fit” with most of them. In addition, submitters of new project concepts are encouraged to review the Reserve’s existing protocols to better understand the general topics that must be covered and the requirements that must be met for any protocol. Assessment criteria for new project concepts include the following.
Whether GHG Reductions Occur Outside Proposed U.S. Caps on GHG Emissions
Since issuing offset credits for reductions that occur at capped emission sources would result in double counting, the Reserve focuses on project types affecting greenhouse gas (GHG) emissions that are unlikely to be capped. In California, for example, an economy-wide cap-and-trade system is being implemented that will ultimately cover all fossil fuel-derived CO2 emissions. Projects that would reduce CO2 emissions from fossil fuel combustion are therefore not being considered for offset protocol development.
Whether GHG Reductions Are Direct or Indirect
Direct emission reductions are those that occur at sources (or sinks) that are directly owned or controlled by the project developer, i.e., the entity that will operate the project and receive Climate Reserve Tonnes (CRTs). All else equal, the Reserve will focus on project types that result in direct reductions. Direct emission reductions are generally easier to verify because the sites where they occur can be easily accessed and directly monitored. When emission reductions occur at sites or sources owned by the project developer, there is also less risk that an entity other than the project developer will claim ownership of the reductions. Thus, these projects are unlikely to be at risk for double counting or ownership issues.
Whether GHG Reductions Are Likely To Be Additional
“Additionality” is a critically important criterion for carbon offsets (see Section 1.2 of the Reserve Program Manual). In general, the Reserve will not develop protocols for project activities that are implemented regularly under “business as usual” circumstances (i.e., in the absence of carbon offset program incentives). When submitting a project concept to the Reserve, it will often be helpful to: (1) identify general barriers (including financial) that currently exist to the implementation of the proposed project type; (2) explain how carbon offset revenues would enable projects to overcome these barriers and allow greater levels of implementation. A detailed financial characterization for a typical project can help to establish whether there is significant potential in developing a carbon offset protocol.
In addition, no project type is will be eligible under the Reserve’s program if the project activity is required by law (federal, state or local). Project types for which the regulatory environment is uncertain may receive a lesser priority in terms of protocol development.
Whether Standardized Additionality and Baseline Determinations are Possible
A core objective of the Climate Action Reserve is to adopt “standardized” approaches to offset crediting. Standardized offset crediting has two main elements:
- Determining the eligibility and additionality of projects using standard criteria, rather than project-specific assessments
- Quantifying GHG emission reductions using standard baseline assumptions, emission factors, and monitoring methods
For more information on standardized offset crediting, please see Section 2.1.1 of the Reserve Program Manual. For some types of projects, it will be difficult to credibly and accurately determine additionality and estimate baseline emissions using standardized criteria and parameters. In general, the Reserve will not prioritize protocol development for these project types. A project type may nevertheless be considered if it is possible to combine standardized additionality assessments with project-specific quantification methods, or where the scope of a protocol can be limited to address only activities and conditions for which standardized approaches are feasible.
Whether There is Significant U.S. Potential for Reducing GHG Emissions
Because it takes significant effort and resources to produce a standardized project protocol, the Reserve will prioritize project types that, if fully implemented, would result in large and geographically diverse GHG reductions. However, because the Reserve is focused on U.S. reduction opportunities, protocols that cover GHG reductions in other countries will generally not be considered.
Whether Well-Developed Quantification Methodologies Are Available
Protocols are more easily developed where sound scientific methods already exist to determine baselines and quantify emission reductions. Although the Reserve does not directly adopt methodologies developed by other organizations (all of its protocols are developed and finalized through public, transparent stakeholder processes), it will prioritize project types for which well-developed and vetted GHG quantification methods already exist.
Whether High Quality Data Are Available for Quantification and Establishing Additionality Thresholds
High quality datasets are necessary to establish accurate quantification parameters, as well as to evaluate “business as usual” activities for the sector in which the project activity occurs. Setting performance thresholds and other standardized tests for additionality requires robust and transparent data on the current state of the sector.
Whether Accurate and Cost-Effective Measurement and Monitoring Techniques Are Available
It is essential to accurately quantify the GHG reductions that will be used for carbon offsets. Accurate quantification depends on accurate measurement and monitoring of a project’s effects on GHG emissions. In some cases, accurate measurement techniques may be unavailable or prohibitively expensive. If the monitoring and measurement techniques are too complex or infeasible, a project type may be rejected for protocol development.
Whether Projects Would Have Positive or Negative Environmental and Social Co-Effects
All else equal, the Reserve will prioritize project types that can create significant co-benefits for the habitats and communities where projects take place. Project types that may cause, or be associated with, significant negative social and environmental impacts will be avoided. Please see Section 2.4.6 of the Reserve Program Manual for further information on the Reserve’s policies on project co-benefits and harms.
If you have questions about protocol development, please contact the Policy Team.