Carbon finance is a certification process, and as is the case with every certification process, specific procedures, transparent documentation and audits are required. The carbon certification process is covered in detail in the Project Cycle section.
The main standards for certifying carbon credits are:
- The Clean Development Mechanism (CDM), established by the Kyoto Protocol, and administered by the Executive Board of the UNFCCC (compliance registry). The Executive Board issues CER (Certified Emission Reductions). As of July 2013 a total of 167 projects have achieved successful CDM registration. Among these, there are 2 PoAs with 82 CPAs. It is the most widely adopted carbon standard for developing carbon projects from developing countries. As CDM is a compliance-based standard governed by the UNFCCC, it is known for its stringency. For more information on CDM standards and procedures, please visit the CDM Rulebook website and the UNFCCC CDM website.
- The Gold Standard, a voluntary registry, issues Voluntary Emissions Reductions (VER) or labels CERs and Emission Reduction Units (ERU) under the Kyoto Protocol. As of July 2013 a total of 35 projects have achieved successful registration as GS VER projects, whereas another 20 projects have achieved GS registration in addition to CDM registration. It is the most widely adopted voluntary carbon standard for developing clean cookstove carbon projects from developing countries. It is known for its strict focus on sustainable development issues. For more information on GS standards and procedures, please visit the GS website.
- The Verified Carbon Standard (VCS), a voluntary registry, issues Verified Carbon Units (VCU). As of July 2013 only two projects have achieved successful VCS registration. For more information on VCS standards and procedures, please visit the VCS website.
- The American Carbon Registry (ACR) is the United States’ oldest voluntary GHG offset program, founded in 1996 by the Environmental Resources Trust and part of the non-profit Winrock International since 2007. ACR registers projects worldwide and issues Emission Reduction Tons (ERTs). As of July 2013 only one project has achieved successful ACR registration. For more information on ACR standards and procedures, please visit the ACR website.
Each carbon standard has its own registration process and fees. The table below presents a rough estimate of the costs for carbon certification, and the project development process:
NOTE: The table is partially based on the publication Carbon finance: A guide for sustainable energy enterprises and NGOs (GVEP, 2010). The values are estimates and can vary according to the context, scale and standard of a particular project.