Program Administration and Authority

Table 5 lists the actors responsible for regulating various key aspects of each offset program: overall administration, validation and/or verification, and project approval and registration. (To learn about the difference between offset standards and offset programs go here).

All offset programs include some form of administrative body to oversee the project approval process to ensure that the offset projects developed meet established program requirements. Although there are several common components of the project approval process, programs have developed varied approaches to confront key quality assurance concerns.

  • Validation requirements provide ex-ante assessment and confirmation of offset project eligibility as defined by the rules of the program or standard.
  • Verification requirements provide ex-post assessments and confirmation of quantification of the volume of emission reductions or removals that have been produced from an offset project across a certain period of time.
  • Registries have been used to reduce concerns regarding double counting by tracking information regarding ownership and development of the offset projects and the credits generated.
  • Third-party auditors are required by some programs to help limit any potential conflict of interest between offset project developers and buyers, which both have financial incentives for inflating the volume of offset credits generated.

The structure of program administrators varies by program type and design (see Table 5 ). Compliance programs are generally administered by either an existing regulatory agency, as in the case of state regulatory agencies under RGGI, or an administrative body established exclusively for the offset program, as in the CDM Executive Board. Voluntary offset providers are managed by a mix of Boards of Trustees, advisory committees and paid staff.

Nearly all programs require some form of project validation and verification. Increasingly, programs require verification to be conducted by an approved third-party auditor independent of either the program administrator or the project developer. Some programs and standards give their auditors the decision-making power to approve or reject a project. Others have a separate body to evaluate and approve projects. Such a program or standard-based decision-making body adds another layer of quality control, as well as administrative burden.

Offset programs have incorporated the use of carbon offset registries to keep track of offset ownership and to minimize the risk of double counting.  A registry assigns a serial number to each verified offset and once the offset is ‘used’ to claim emission reductions, the serial number is retired preventing the credit from being resold. No universal registry exists for either the compliance or voluntary offset markets, limiting their utility for minimizing double counting across the offset market. More about registries.