Not all carbon credits are created equal. The voluntary carbon market is flooded with low-quality offsets that don't deliver real climate impact. Here's how to spot them.
Red Flag 1: No Third-Party Verification
If a credit hasn't been independently verified by an accredited auditor, it's not credible. Legitimate credits come with verification reports from bodies like DNV, SGS, or Deloitte. If the seller can't produce one, walk away.
Red Flag 2: No Permanence Buffer or Risk Pooling
Carbon credits can fail. Forests burn. Projects shut down. Real credits are backed by a permanence buffer — typically 20–30% of issued credits are held in reserve to cover losses. If there's no buffer, the credits are at risk.
Red Flag 3: Additionality Not Demonstrated
Would the project have happened anyway? If yes, it's not additional — it's just business-as-usual. Legitimate projects prove they wouldn't exist without carbon finance. Demand to see the additionality assessment.
Red Flag 4: Registry Serial Numbers Unavailable
Every real credit has a unique serial number registered on Verra, Gold Standard, or another registry. You should be able to look it up online and verify its status. If the seller can't provide this, the credit is fake.
Red Flag 5: Project Documentation (PDD) Not Public
The Project Design Document (PDD) is the blueprint for how credits are generated. It should be publicly available. If it's hidden, there's something to hide.
Red Flag 6: Promised Prices Far Below Market
If someone's offering credits at $2–3/tonne when the market price is $15–20, they're either desperate or selling fakes. Real credits command real prices.
Red Flag 7: No Co-Benefits or Biodiversity Claims
High-quality credits deliver co-benefits: jobs, biodiversity, water security. If a project only claims carbon reduction with no other benefits, it's likely low-impact.
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