Emissions Offsets Must be Verified

Whether buying or selling carbon offsets, the need to verify the authenticity of offset claims is crucial. Assurance, as it is called by a growing industry of carbon offset verifiers, is still a work in progress, as this field is so new.

While great strides have been made in offsetting greenhouse gases - especially Alberta's introduction of North America's first regulated emissions offsets market - knowing what is for sale rests on an evolving process of verification. Understanding this is essential to ensuring both buyers and sellers realize value in the growing greenhouse gas (GHG) offsets market.

Offsets verification involves three parties: a buyer, a seller and an objective, third-party verifier. The verifier provides assurance that the amount of GHG emissions the seller claims to have reduced is valid and constitutes a GHG credit that may be traded or purchased by potential buyers.

While Alberta has regulated protocols for trading GHG offsets, there are no standards for who can verify the GHG offsets being traded. Christine Schuh, leader of climate change services for PriceWaterhouseCoopers Canada, recommends looking for a comprehensive team approach grounded as much in accounting as science. Good verifiers should demonstrate competence in applying ISO 14064 Part 3, the current gold standard for verifying GHG assertions.

"We need to dispel the notion offset verification is easy," says Schuh. "Purchasers and sellers should seek verifiers who can bring together the appropriate team of experts that understand the industry seeking to provide the offset." Verifiers need the infrastructure to set up robust controls to inventory current GHG output and output after reduction measures are in place. Verifiers should also provide the appropriate balance of client confidentiality and transparency in how GHGs inventories and reduction claims are verified.

Because every industry has its own peculiarities, often the verifier will go through several iterations of reporting GHG emission reduction claims to establish accurate verification. This should be seen as a positive reflection of an open, objective dialogue between the verifier and the party seeking the offset verification. Conversely, verifiers who quickly offer assurance of seller claims should not inspire confidence.

Robert Janzen, vice-president of operations for Climate Check Canada, stresses the need of an accrediting body for third-party verification. Already, the Greenhouse Gas Management Institute is offering on-line courses, while Environmental Careers Organization Canada is working to accredit professional offset verifiers. But until a standard is in place, experts like Janzen and Schuh compete in an evolving market with verifiers whose expertise ranges from non-existent to cutting edge.

What should purchasers and sellers do in the caveat empto world of GHG offset verification? For now, Janzen recommends interested parties contact Climate Change Central and similar objective organizations for lists of competent verifiers.

Patience, as much as diligence, seems to be the key. "I compare GHG verification now to oil and gas reservoir calculations with limited tools 50 years ago," concludes Schuh, "We're doing a lot of things right, and headed in the right direction, but we also have a lot of work to do."