How to read a carbon credit before you buy it

Buying carbon credits is one of the few corporate purchases where the buyer often cannot describe what they bought. The invoice says one tonne of CO₂e. What sits behind that tonne varies enormously — and so does whether it did anything.

This is a checklist for reading a credit before you commit budget to it. It’s deliberately practical, and none of it requires a climate science background.

1. What would have happened anyway?

This is the additionality question, and it’s the one that decides whether a credit means anything. If the activity would have gone ahead without the credit revenue, you haven’t funded a reduction — you’ve made a donation to an existing project and taken credit for its emissions.

Ask directly: what was the alternative scenario, who decided it, and what evidence supports it? Be sceptical of projects that were already economically attractive on their own. A wind farm built in a market where wind is the cheapest option was not waiting for your money.

2. Is it a reduction or a removal?

These are not interchangeable, and the distinction increasingly matters.

• A reduction (or avoidance) means emissions that would have happened, didn’t — protecting forest that was slated for clearing, capturing methane that would have vented.
• A removal means carbon already in the atmosphere was taken out and stored — reforestation, direct air capture, enhanced weathering.

Both can be legitimate. But only removals actually reverse a past emission, and if you have a net-zero commitment, the standards you’ll eventually be held to treat them very differently. Know which you’re buying, and don’t let a portfolio blur the two.

3. How long does the storage last?

Permanence is where a lot of well-intentioned buying falls down. Carbon stored in a forest can return to the atmosphere in an afternoon — fire, disease, a change of land ownership, a change of government. Carbon mineralised in rock does not.

Ask how long the storage is claimed to last, what happens if it fails, and who carries that risk. A buffer pool — where a share of credits is held back to cover reversals — is a good sign. “We expect the forest to remain” is not a mechanism.

4. Could someone else be counting the same tonne?

Double counting happens quietly. The host country may count the reduction toward its own national target while you count it toward yours. Two registries may both list the project.

The protections are mundane but checkable: a serial number, a single named registry, a public retirement record in your company’s name, and — for international projects — a clear statement on whether a corresponding adjustment has been made. If a seller can’t show you the retirement record, you don’t own what you think you own.

5. How was the baseline measured?

Every credit is the gap between what happened and a counterfactual that by definition didn’t. The baseline is therefore an estimate, and estimates can be generous.

Look for who set it, how conservative it is, whether it’s periodically revisited, and whether the monitoring is direct measurement or modelling. A project that re-measures and restates is behaving well, even when the restatement is unflattering.

6. Who verified it, and what did they actually check?

Third-party verification is not a single standard. Find out which body verified the project, how often, whether they visited the site, and whether their reports are public. “Certified” with no named verifier and no public report is marketing.

The order these questions belong in

If you only have time for three, ask these:

1. Can I see the retirement record in my company’s name? If not, stop here.
2. What would have happened without this project, and who checked?
3. If the storage fails, who covers it?

Those three separate most credible credits from most of the rest, and none of them require specialist knowledge to evaluate.

The uncomfortable part

No credit is as good as not emitting. Offsetting is what you do about the emissions you have not yet eliminated, and it works best when it’s visibly the smaller half of the strategy. A company with a serious reduction plan and a modest, well-documented offset portfolio is in a far stronger position — commercially and reputationally — than one with an impressive offset portfolio and a flat emissions curve.

The questions above are also, usefully, the questions a journalist or a regulator would ask. If you can answer them about everything in your portfolio, greenwashing accusations don’t have much to land on.

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EasyOffset helps companies manage carbon offsets and climate initiatives they can actually stand behind. More at easyoffset.net.