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Searching for the best carbon offsets? Read about Giving Green's approach to recommending offsets. Giving Green's approach to recommending offsets // BACK This report was last updated in November 2021. Summary In this document, we explain our approach to assessing carbon offsets and determining which ones to recommend. We are searching for offsets where there is a direct, causal, and verifiable link between someone purchasing an offset and a decreased amount of greenhouse gases (GHGs) in the atmosphere. First, we look at the offset market sector by sector, to determine which sectors are most likely to provide reliable offsets. For sectors that we determine to be likely to produce high-quality offsets, we then search through available projects and recommend those that meet our criteria. We rate offsets using five categories: causality, project-level additionality, marginal additionality, permanence, and co-benefits. Note that our offset recommendations are not comprehensive - we have not assessed all offsets in the market. (In fact, many offsets do not have any publicly-available information!) We have developed a systematic approach to assessing offsets, and recommend the best ones we find. As our research continues, we expect to find more offsets to recommend. If any offset providers believe that their project would meet our quality bar using the methods described below, please reach out to us! Sector-level analysis We begin by conducting offset analyses at the sector-level, since offsets in the same sector tend to have similar strengths and weaknesses. For each sector (such as forestry, renewable energy, etc.), we have produced a sector research report, in which we discuss the logic for offsets in the sector, and determine whether we believe the offsets are likely to be reliable. We generally proceed by working through the certification process for an example offset. In this process, we show what data must be provided by the project developers, and what assumptions are accepted by the certification agencies. We then discuss whether we believe these assumptions, consulting the literature to validate them. Based on this analysis, we determine if the sector appears to be promising for high-certainty offsets. If so, we search for specific offsets to recommend. If we determine that a sector is not promising, that does not necessarily mean that there are no high-quality offsets in the sector. But given our limited research resources, we have simply concentrated our search for offsets on what we consider to be the most promising sectors. We are open to finding high-quality offsets in all sectors, and will even consider offsets in less promising sectors if they seem to be of exceptional quality. Offset ratings After performing sector-level analyses, we then analyze and rate specific offsets in promising sectors. We searched for offsets to consider by searching publicly-available websites selling offsets, as well as offset registries. We concentrated our search among offsets that were easy to purchase online and where detailed information on the projects they support was available online. We rated offsets using five main categories: causality, project-level additionality, marginal additionality, permanence, and co-benefits. These are summarized in the below table. For each offset that we analyze, we rate each of these categories as ‘ High ’, ‘ Medium ’, or ‘ Low ’. In order to be recommended, offset projects need to make a compelling overall case that purchasing the offsets reduces emissions. However, they do not have to score highly in all categories to do this. We elaborate on this in our explanations of each metric below. Causality Causality refers to the extent to which the project actually causes reduced GHGs in the atmosphere. Determination of causality comes from understanding the “counterfactual”, which is what the state of the world would have been like without the project. However, this can be difficult to determine. For instance, consider a project that protects an area of jungle from being deforested. Determining causality requires answering two questions. First, does avoiding deforestation lead to reduced GHGs? This is a purely scientific question, which can be answered by consulting the literature. It is well-established that cutting down a forest leads to more GHGs in the atmosphere, since the trees no longer absorb CO2, and they eventually decompose, emitting CO2 in the process. This part of causality is relatively easy to establish in this example. Secondly, would the trees would have been cut down in the absence of the project? If not, then the project is not avoiding emissions. This is more difficult, as it is not possible to know with certainty what would have happened without the project. Offset projects must make the case that their project leads to fewer trees being cut down, and they generally use data concerning deforestation rates before the project or in similar areas. This type of analysis is difficult for an offset certifier to validate, especially since the project developer has an incentive to exaggerate the amount of causality. Causality is central to an offset being valid, and an offset must have high certainty of causality to be recommended by Giving Green. In cases (such as the forestry example) where changes in human behavior are needed to guarantee causality, Giving Green requires evidence from a rigorous impact evaluation to validate this behavior change. A rigorous impact evaluation provides a convincing measurement of the counterfactual, and calculates the change in GHGs compared to this counterfactual scenario. Project-level additionality An offset satisfies project-level additionality if the project it is supporting would not happen without the sales of offsets. This requirement tends to be satisfied for projects run by non-profits who solely rely on offset revenue in order to operate. However, it can be very difficult to determine for projects with multiple revenue streams. For instance, consider a wind energy project that is considering selling carbon offsets. In many markets, wind energy is cost-competitive with other kinds of energy, and wind energy plants are built and profitable without the need for carbon offsets. In this case, a wind energy project does not satisfy project-level additionality. However, in other markets, a wind energy plant may not be profitable, and therefore would not have been built without an additional revenue stream from offsets. In this case, the offsets would have project-level additionality. The problem is that in a case like this, it is very difficult to verify the actual financial circumstances of the project. In order to get certified, project developers need to provide a financial model where they show that with offset revenue they would be profitable, but without the offsets they would not be. However, the projections of future flows of costs and revenues necessary for such a model rely on a significant amount of guesswork. Additionally, project developers have huge incentives to make a case for additionality. The offset certifiers likely have no way to validate these models, and also must rely on their own guesswork to decide if they believe the project developers’ case. In our assessments at Giving Green, we accept claims of project-level additionality only when projects rely on offsets for most or all of their revenue stream, or when offsets are crucial to raising private sector capital. Also, the project must not be required by regulations. That being said, we may recommend projects that do not satisfy project-level additionality if they satisfy marginal additionality, as described below. Marginal additionality A project satisfies marginal additionality if each additional offset purchased leads to more GHGs being reduced. This is an important requirement for offsets to work as advertised: the purchase of every single offset must cause extra GHG reduction. To explain the difference between project-level additionality and marginal additionality, we will use a few examples. Consider a landfill gas capture project. In areas where they are not required by law, landfill gas projects generally satisfy project-level additionality since there are no economic incentives besides offset revenues to build them. In general, the project developer foots the bill for the up-front costs of building the system, and then recoups these costs by selling offsets for the emissions avoided each year. Taking the concept very literally, no offsets generated from this project actually have marginal additionality, since the project has already been built. But given that the project was likely built only due to the expectation of being able to sell offsets, one could argue that offsets sold shortly after the project are really contributing to reduced GHGs. The issue is that the project developer can sell offsets as long as the gas collection system is still operational, and this may continue long after the project costs are paid off. After project costs (including opportunity costs) are covered, additional offset revenue just goes to pad the profits of the project developer. Additional offsets absolutely do not contribute to additional reduced GHGs. The opposite can also be true: projects can have marginal additionality without having project-level additionality. For instance, consider a for-profit provider of clean cookstoves. The company may have a viable business model, and would exist and sell cookstoves even if offsets were not available. Therefore, they do not exhibit project-level additionality. However, if they do sell offsets, this allows them to lower their prices, therefore selling more stoves. In this case, each additional offset can contribute to additional lowering of stove costs, resulting in more stoves being sold. Therefore, the offsets satisfy marginal additionality. A significant factor determining whether projects have marginal additionality, is whether they have ongoing activities that can continually be ramped up to remove more emissions, versus being composed of a single large project. For example, a cookstove manufacturer can always use offset revenue to distribute more cookstoves, but a large landfill gas capture project generally can not just expand its operations. Also, a project developer that makes profits is less likely to satisfy marginal additionality, since any offset revenue going to profits cannot be additional. Another factor that can play into marginal additionality is profits. If the project developer is a for-profit company and is actually booking profits above the opportunity costs of its founders and investors, this is a reason to question marginal additionality. This is because in this case, additional offset purchases simply increase profits and are unrelated to decreasing GHG emissions. At Giving Green, we view marginal additionality to be critical to the validity of an offset, though we admit it can sometimes be difficult to ascertain. We need to have high confidence in the marginal additionality of an offset to be able to recommend it. Note that this is a higher bar than required by the offset certifiers, whose definition of additionality only includes project-level additionality. Permanence An offset provides permanent emissions reduction if there is no chance of undoing the project’s activities. In projects that avoid emissions, this is frequently satisfied in a trivial manner. For instance, if a project incinerates a refrigerant, the GHG is destroyed and emissions are avoided permanently. But permanence can be more difficult to establish for forestry or other land-use projects. For instance, consider an offset project that prevents a portion of forest from being logged. These gains can be completely undone if, in the future, the jungle is logged or burns down. This is known as a “reversal”. Offset certifiers have tried to deal with this risk by requiring project developers to keep a certain percentage of offsets unsold in a so-called “buffer pool”. This acts as insurance, and is drawn down when there are demonstrated reversals. But it is difficult to be certain if reversals will actually be reported in the future, and if there will be enough offsets in the buffer pool. For instance, by some estimates , the size of the buffer pool in the offset scheme in California’s cap and trade is insufficient due to increased fire risk. Giving Green views permanence as an important component of an offset’s validity, and therefore we need a high degree of certainty in permanence to recommend an offset. However, since land-use projects are important and it is impossible to completely verify permanence for these, we may recommend projects with some permanence uncertainty as long as strong, proven methods are put in place to guard against reversals. Co-benefits Some offset projects offer additional benefits besides GHG reductions, known as “co-benefits”. For instance, these could include improving the income of poor families, or improving biodiversity. Giving Green only uses GHG reductions to determine which offsets to recommend, and therefore it is not necessary for an offset to have co-benefits to gain our recommendation. However, as many offset purchasers would like to buy offsets with co-benefits, we highlight them in the analysis of our recommended offsets.

Do waste biogas capture carbon offsets avoid CO2 emissions? Read our independent analysis. Waste Biogas Capture // BACK This report was last updated in November 2020. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Waste sites (such as landfills and agricultural waste storage) produce biogas from the decomposition of organic materials, including the powerful greenhouse gas methane. With the right infrastructure and systems, companies and municipalities can capture this methane and either destroy it or convert it into energy. Biogas capture projects cause a clear reduction in greenhouse gas (GHG) emission, but it is unclear whether waste biogas carbon offsets actually cause the projects to be implemented. While we have not yet found any biogas-related carbon offsets to recommend, we do believe that there are likely circumstances where these offsets do cause real emissions reductions. Better biogas offsets are in places where methane capture is not mandated by regulation (either current or future), and in sites where the electricity generated by biogas is not enough to make the project profitable. Overall, we believe that there are likely good biogas offsets that are additional, but thus far we have been unable to find any that meet our criteria. As not all offsets are offered online, it is possible that these high-quality offsets are being directly sold to corporate buyers or are only transacted through brokers. Giving Green will continue searching for biogas projects we can recommend with confidence. Waste biogas capture as a carbon offset Landfills and agricultural waste sites produce biogas from the decomposition of organic materials. Biogas is composed of primarily methane and carbon dioxide (CO2), along with a small amount of other organic compounds. Both methane and CO2 are greenhouse gases that trap heat in the atmosphere. Methane is 28-36 times better at trapping heat in the atmosphere than CO2 over a 100 year period, making it a particularly potent GHG [1]. Of all methane produced in the United States, landfills are the third-largest source with approximately 14% of overall emissions [2]. Reducing methane emissions is a key priority in combating climate change. Waste sites emit methane through an anaerobic process. Large amounts of organic material (e.g. food, wood) are deposited into landfills, and agricultural waste sites contain production byproducts (such as plant husks or animal excrement). Bacteria decompose these materials and produce a mixture of gases, which is then emitted into our atmosphere and contributes to global warming. Biogas normally escapes from waste sites into the atmosphere soon after it is produced. However, if the right infrastructure and systems are put in place at waste sites, companies and municipalities can capture the methane and either destroy it or convert it into energy. Gas extraction wells and piping systems can be set up at waste sites and used to move biogas from the production site to treatment locations. At the treatment locations, biogas is either flared (burned to convert methane into a less harmful gas) [3] or converted into energy like electricity or car fuel. To encourage biogas flaring or capture, the US Government regulates large emitters of GHG through the Clean Air Act and through reporting requirements to the Environmental Protection Agency (EPA). Regulations require landfill emissions to be measured and publicly documented. Large emitters are required to either capture and destroy or convert their landfill gas into a reusable resource [4]. However, biogas emissions from agricultural operations and smaller landfills are more lightly regulated, if at all. Carbon offsets fund the construction and upkeep of biogas capture and treatment infrastructure. In the absence of regulation or profitable circumstances, biogas capture and treatment is unlikely to occur. Causality Overall, if projects are executed correctly, then waste biogas capture is highly likely to cause reductions in atmospheric greenhouse gas emissions. Project-level additionality In the absence of regulation or profitable circumstances, biogas capture and treatment is unlikely to happen. As such, carbon offsets can be catalytic for these projects in cases in which they are additional. The cost of biogas projects depends on the size, location, and configuration of the site. There are significant capital outlays at the start of a project, as the physical infrastructure is designed and created. After the initial expenditure, there are routine costs to upkeep equipment and oversee operations. For projects that are not profitable and exempt from government regulation (e.g. too small), carbon offsets can provide a financial incentive to capture and use the biogas. The EPA estimates that a privately owned and operated project with a 3 megawatt turbine and no previously installed capture system costs approximately $8.5 million to install and will lose approximately $3.5 million over a 15-year lifetime [5]. While the above cost does not factor in tax credits or exemptions or the ability to use the electricity produced for on-site operations, the cost of biogas capture and treatment systems are often prohibitive for companies and municipalities [6]. Marginal additionality The marginal additionality of waste biogas carbon offset projects varies based on where the project is in the project lifecycle. Before construction, while trying to achieve sufficient financing for the project to go ahead, carbon offsets are likely to be marginally additional (as long as the target goal is eventually reached). After construction, however, the marginal additionality of waste biogas capture projects is relatively low as the binding financial outlay is for the construction of the initial system. In some cases carbon offsets might continue to fund operational expenses, which would satisfy marginal additionality; we have not yet found any projects in this space that make a compelling claim to use carbon offsets in that way. Permanence Some waste biogas projects destroy emissions; these have high permanence. Once the emissions are captured and destroyed, they are not at risk of leaking back into the atmosphere. We do not think that the capture of these emissions is likely to increase emissions elsewhere. For projects that use captured emissions to produce energy, we see the permanence as lower. These projects often use the gases to create energy through a process that eventually emits them, meaning that they are not permanently removed from the atmosphere. In these projects, the benefit is more “clean” energy created by gases that would otherwise have just leaked into the atmosphere without any additional benefit. Co-benefits With projects that use waste biogas to create electricity or other energy, the co-benefits are more energy produced for the surrounding regions. We view this co-benefit as fairly weak as most of the surrounding where these projects are happening have other sources of energy. Assessment of waste biogas capture projects Carbon offsets for biogas are most “impactful” when they meet the best-in-class standards for carbon offsets - additional, not overestimated, permanent, not claimed by another entity, and not associated with significant social or environmental harms - along with meeting the following conditions [7]: Project is not required by regulation to implement biogas capture and treatment Project is not profitable from the sale of renewable resources from biogas treatment Project is capital constrained and will not happen without carbon offsets Carbon offsets go directly to purchasing biogas project infrastructure or maintenance, as opposed to non-essential inputs When reviewing projects for this report, we found that it was difficult to get enough information to determine whether projects met the above conditions. Simply being certified by one of the major certifying agencies did not give us confidence that the project was indeed additional. We expect that some biogas projects will meet these conditions, and some will not. This appears to be confirmed by what others have concluded [8][9]. For example, the GHG Management Institute and Stockholm Environment Institute say that the usefulness of landfill gas projects and associated carbon offsets depends on the project. They state: “Varies by location. Projects are likely additional in most parts of the developing world. In developed countries, including the United States, some projects are pursued to avoid triggering regulatory requirements, and projects that generate energy can be economical without carbon revenue.” The report also describes how there is uncertainty in baseline levels of methane output with these projects, which further adds to the difficulty of quantifying their impact [10][11]. We therefore focused the remainder of our research on waste biogas projects in developing countries and projects involving small landfills in the US. Developing countries: Unfortunately, we found few offsets in developing countries available for sale online. The UN offers two such projects, capturing biogas from agricultural waste in India and Thailand. However, after further consideration, we didn’t feel comfortable recommending either. The Ratchaburi Farms Biogas Project in Thailand is a biogas capture system that generates energy for use on a large pig farm. The first issue with additionality is that the system may be profitable, and as a large company it’s plausible that the farm could and would have made the investment without the carbon credits. But more worrisome is that the project is quite old. It started operating in 2008, and in its original application for offset certification, it requested credits for 10 years. The project was a partnership with the Government of Denmark, who committed to buying some of the credits as part of their commitment under the Kyoto accord. So as far as we can tell, the current offsets for sale were generated before 2018 but were not part of the purchase agreement with Denmark. Given this, it is quite hard to believe that expectation of voluntary offsets purchases 10 years in the future actually contribute to additionality. The Mabagas Power Plant in India is somewhat more promising. It generates energy by procuring animal waste from nearby farmers and feeding this waste into its digesters. Without this plant, this waste would degrade and release biogas into the air. There are no regulations requiring the construction of the plant. However, a couple of worries have prevented us from recommending these offsets. First, the project seems plausibly profitable. Although the IRR documents submitted as part of the offset certification procedure claim that selling carbon credits is necessary to achieve viability, these numbers are hard to verify. Next, there is a question of who precisely is on the receiving end of these offsets. Mabagas was launched as a joint venture between two companies that mainly deal in (petroleum-based) oil and gas: the state-owned Indian Oil Company, and the German company Marquard & Bahls. As revenue from offsets will ultimately flow to these companies or their subsidiaries, it is unlikely that this capital will fuel more green projects. Overall, we cannot recommend these offsets given the information available at this time. US-based projects: Although large emitters are required to install methane capture systems, small landfills are not covered by these regulations, and carbon credits may certainly spur them to build capture systems. However, regulations are constantly changing [12], and plants may install landfill gas capture systems in anticipation of coming under regulatory authority (due to expansion or changing regulations). We explored US landfill gas offset options and, at least given the data available, felt unable to confidently recommend any of them. For instance, this landfill in Massachusetts seems to be a project that was very much spurred by carbon credits, with credits originally issued for ten years. However, the offsets available for purchase now are for the second issuance of offsets, while the actual infrastructure seems to only have been modestly updated. It is unclear what additionality these new offsets are providing. The Hilltop Landfill in Virginia was a small landfill that installed methane capture financed with carbon credits. But the landfill closed in 2013, and it seems like the investment has already been refunded from previous carbon credit sales [13]. So further sales are likely not additional. Other options we explored are larger landfills that seem likely to fall under methane capture regulations as they grow or as new regulations are put into place. Overall, we believe that there are likely good biogas offsets that are additional, but currently, we have been unable to find any that meet our criteria. As not all offsets are offered online, it is possible that these high-quality offsets are being directly sold to corporate buyers or are only transacted through brokers. Giving Green will continue searching for biogas projects we can recommend with confidence. [1] https://www.sepa.org.uk/media/28988/guidance-on-landfill-gas-flaring.pdf [2] https://www.epa.gov/lmop/frequent-questions-about-landfill-gas [3] https://www.epa.gov/lmop/basic-information-about-landfill-gas [4] https://www.epa.gov/lmop/basic-information-about-landfill-gas#methane [5] https://www.eesi.org/papers/view/fact-sheet-landfill-methane [6] Direct-use projects (i.e. where the energy created is used to power upkeep of the landfill) cost less and have a slightly higher ROI, but are less common because they require their facilities to be nearby. [7] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [8] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [9] https://www.drawdown.org/solutions/buildings-and-cities/landfill-methane [10] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [11] https://www.drawdown.org/solutions/buildings-and-cities/landfill-methane [12] http://biomassmagazine.com/articles/16424/epa-proposes-federal-plan-under-2016-landfill-gas-regulations [13] https://www.ecosystemmarketplace.com/articles/offsetting-local-inside-landfill-gas-project/ References https://www.epa.gov/lmop/basic-information-about-landfill-gas https://www.epa.gov/sites/production/files/2017-04/documents/lmop_2017_special_session_cowan.pd https://www.r-e-a.net/work/biowaste-recycling/ https://wasteadvantagemag.com/business-case-carbon-offsets-waste-diversion-waste-digestion-composting/ https://sustainability.wm.com/downloads/WM_CDP_Climate_Change_Response.pdf https://earthworks.org/issues/flaring_and_venting/ https://en.wikipedia.org/wiki/Landfill_gas_utilization https://www.eesi.org/papers/view/fact-sheet-landfill-methane https://www.terrapass.com/project/flathead-county-landfill-gas-to-energy http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf https://www.sepa.org.uk/media/28988/guidance-on-landfill-gas-flaring.pdf http://www.aqmd.gov/docs/default-source/permitting/toxics-emission-factors-from-combustion-process-.pdf?sfvrsn=0 https://www.eesi.org/papers/view/fact-sheet-landfill-methane https://www.co2offsetresearch.org/consumer/Methane.html https://americancarbonregistry.org/carbon-accounting/standards-methodologies/landfill-gas-destruction-and-beneficial-use-projects https://americancarbonregistry.org/carbon-accounting/standards-methodologies/landfill-gas-destruction-and-beneficial-use-projects/landfill-gas-destruction-and-beneficial-use-methodology-v1-0-march-2017.pdf

Giving Green recommended Burn Manufacturing as one of the most effective carbon offset providers in 2022. BURN // BACK This recommendation was last updated in November 2022. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We do not have plans to update this recommendation in the foreseeable future as we have paused our work assessing direct carbon removal and offset projects. Questions and comments are welcome. Giving Green believes that donating to our top recommendations is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these recommendations do) may not be tenable for all donors, especially busines s es. Taking this into consideration, we recommend BURN specifically for businesses given its focus on carbon removal and more direct alignment with corporate net-zero ambitions. We believe BURN to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top recommendations. Overview of BURN stoves Theory of Change Mechanism Causality Project-level additionality Marginal additionality Permanence Co-benefits Cost-effectiveness Conclusions Overview of BURN stoves BURN Manufacturing designs, manufactures, and distributes a line of fuel-efficient cookstoves in nine countries across Africa. With two solar-powered manufacturing facilities in Kenya, BURN describes itself as “the only vertically integrated modern cookstove company in Sub-Saharan Africa”. It has distributed over two million stoves through several channels. The models it primarily uses for carbon credit purposes are the charcoal-burning Jikokoa Classic and the wood-burning Kuniokoa stoves, which are directly distributed or delivered through partnerships. [1] Giving Green recommends BURN stoves on the weight of randomized controlled trial (RCT) evidence demonstrating high causality of emissions reductions. BURN stoves also have the co-benefit of reducing household spending on cooking fuel, improving health outcomes, and reducing time spent cooking. Theory of Change The following theory of change maps the link between BURN stoves and reduced GHG emissions. While BURN primarily sells its stoves in the market, its offsets fund projects that provide stoves to households at heavily reduced prices or for free. [2] BURN stoves are designed to increase the fuel efficiency of households that use biomass as their primary cooking fuel source. Offsets contribute to all facets of these projects, including production, consumer engagement, and stove distribution. Increased stove usage over time leads to reduced GHGs over time as consumers switch from their traditional cookstoves to BURN’s fuel-efficient cookstoves. Figure 1: Theory of change for reducing GHGs via purchasing BURN's offsets. We also lay out key parameters we use to model the cost-effectiveness of purchasing offsets from BURN: Assumptions (relevant stage of theory of change as described above in parentheses): Offsets increase stove production and distribution. (2) There is marginal additionality in the number of BURN stoves being used due to offset money. (3) Stoves are fuel efficient. (4) Consumer behavior is modified. (4) Money saved by consumers doesn't lead to GHG emitted elsewhere. (4) Model parameters: How many offset dollars are needed for one additional stove? (3) What is the reduction in fuel use over time? (4) How is reduction in fuel converted to GHGs averted? (4) What % of GHG reduction is maintained? (4) Mechanism The use of BURN’s cookstoves avoids emissions that would have been released by less fuel-efficient methods of cooking. Causality As mentioned in our overview of cookstove offsets , the academic literature on the link between efficient cookstoves and reduced emissions is mixed. The amount of credits a stove generates is highly variable, depending on the methodology, geography, profile of households receiving products, fuel usage (which is measured pre- and post-intervention), cooking practices, and product specs. For example, stoves in Somalia are credited more due to the less efficient standard baseline stoves, larger household size, higher rate of deforestation, and lower fuel-stacking. [3] Berkouwer and Dean (2022) conducted a rigorous RCT trial on the impact of BURN stoves and found that charcoal fuel usage, as measured by weighing of ashes and by self-reported use, declined by around 39%. [4] This is close to BURN’s claims of a 50% reduction in fuel usage. Additionally, a smaller experiment involving 154 stove users confirmed that these reductions in fuel use persisted 18 months later. We would have liked to see long-term usage data from their larger RCT sample to verify the persistence of fuel use reduction, but we view these results as encouraging. The stove model studied in this RCT was the Jikokoa Classic, which is still primarily used for most credit-producing projects alongside the Kuniokoa model. [5] Target markets remain similar to the context used within the study. [6] Overall, we view the evidence on the causality of BURN stoves in reducing GHG emissions to be quite strong. However, our assessment of the exact greenhouse gas reduction is less certain now that BURN has expanded to different geographies and stove types. Project-level additionality Project-level additionality seeks to answer the following question: would BURN exist and sell stoves in the absence of offsets? The majority of BURN’s revenues are from stove sales. Offsets are just a small part of its income, estimated at roughly 2-3% of total revenues. Representatives from BURN claim that offsets are an unreliable source of income, and therefore they cannot rely on income from offsets to fund their core business. However, offset money is generally tied to specific projects that distribute stoves among populations that normally would not have access to them. Carbon credit revenue allows Jikokoa and Kuniokoa stoves to be sold at a subsidized, more affordable price; we believe these projects would likely not exist without donor money. Overall, we assess that BURN offsets have a medium level of project-level additionality, as it’s difficult to verify whether offset money is directly going to projects that distribute stoves for free or reduced prices. However, from 2022, BURN has lowered prices for all stoves in all markets, meaning that every stove sold is now subsidized by carbon offsetting. BURN claims that as a consequence, the vast majority of BURN's distribution would now not be feasible without the sale of credits . Marginal additionality To achieve marginal additionality, each offset purchased must lead directly to additional emission reductions. For BURN, there is certainly potential for each additional offset sold to lead to more stoves being sold or used. While offsets are generated from previous projects, showing a market for offsets allows BURN to continue developing and marketing new projects with subsidized stoves. However, money is fungible. BURN could book money from offset sales as profits or raise salaries. It could also invest in marketing strategies that do not work. BURN, however, is a social enterprise with multiple impact investors on its board. BURN’s mission is “saving lives and forests.” It also claims that all of its offset projects are “break-even” and do not contribute to other parts of BURN’s business. While we cannot verify its claim of using offset revenues to increase stove distribution, we find the claim consistent with BURN’s expansion strategy and believe that the additional income earned will help put more stoves in the hands of families. Overall, it is not possible to verify with certainty that an additional offset purchased leads directly to the purchase of additional stoves and, therefore, to the reduction of GHGs in the atmosphere. However, BURN is a social enterprise, and we believe that it is likely that with more revenue, it will increase stove distribution. Permanence Fuel use reduction from clean cookstoves represents permanent decreases in emissions. Co-benefits Beyond reducing GHG emissions, Berkouwer and Dean (2022) also found clear economic benefits for households using BURN stoves. Berkouwer and Dean (2022) estimate that for the study population, purchasing a BURN stove resulted in fuel savings of $119/year, roughly equivalent to one month of income. They conclude that relative to a $40 unit price, the internal rate of return for one household is 295% per year, and “larger than most relevant alternative investments likely available to households.” BURN stoves can make a real difference in a family’s spending power. In addition, BURN stoves reduce the time spent cooking – a burden predominantly borne by women. Berkouwer and Dean (2022) find an average reduction of 54 minutes per day, for households using the BURN stoves. Using improved cookstoves also improves health, as better indoor air quality could decrease the incidence and severity of respiratory diseases. [7] Berkouwer and Dean (2022) find that BURN stove users self-report better respiratory health than those who did not use BURN stoves. BURN research finds that the Jikokoa reduces indoor air pollution (PM2.5 and CO) by 65%, and that the Kuniokoa reduces smoke by 82%. Cost-effectiveness Giving Green conducted a cost-effectiveness analysis to estimate the cost per ton of CO2 removed from using BURN’s fuel-efficient cookstoves. Our goal is to validate our recommendation of BURN as a highly effective agent in reducing GHG emissions. The data we use comes primarily from project-level data from BURN alongside impact estimates from Berkouwer and Dean (2022). View our model here . The RCT conducted by Berkouwer and Dean (2022) concluded that study households annually spent 39% less on charcoal, which translated to a reduction of 331 kg in charcoal per household per year, given local charcoal prices at the time of the study. The Food and Agriculture Organization of the United Nations (2017) estimates that kg of charcoal emits 7.2–9.0 kg of CO2e from the production process alone; combustion adds 2.36 kg of CO2e. [8] Taking the midpoint of the former range, we estimate that each stove avoids 3.46 metric tons of CO2e per household annually. BURN lifetime analyses based on testing data and field data suggest that the lifetime of stoves subsidized by carbon credits may be around 5-7 years. [9] BURN told us that field survey data have an approximate 6% annual attrition rate (i.e., BURN is no longer able to reach around 25% of initially-surveyed cookstove owners by the fifth year of surveys). [10] If unreachable households are more likely to no longer use BURN stoves, relative to households that BURN is able to reach for surveys in subsequent years, it’s possible that we have overestimated the cookstove lifetime. As a rough adjustment for this, we use BURN’s lower-bound estimate of a five-year stove lifetime. Adding a 3% future carbon discount, our final estimate of GHGs avoided per household is 17.31 tCO2e over the lifetime of the stove. To then obtain the offset dollars required per tCO2e avoided, we incorporate BURN’s production-to-delivery cost of $76.28 USD, [11] which is its estimate for certain offset-funded projects. Dividing this quantity by 17.31 tCO2e, we estimate that $4.81 in offsets avoids 1 ton of CO2e. This number is less than the price at which BURN sells an offset for a ton of CO2 on its website—which varies over time but is $30/ton as of November 2022—and suggests that offsets from BURN are highly cost-effective. There are multiple reasons why our final estimate is not equal to the costs stated on BURN’s website. First, despite the stove’s estimated lifetime of 5-7 years, the crediting period for BURN is shorter because not all stoves will last this long. As a result, it does not make financial sense to conduct the validation exercises needed to issue credits once a non-negligible proportion of stoves have failed. Next, there may be differences in which parts of the charcoal life cycle are accounted for in the estimation of GHG averted — combustion, or combustion plus production. According to BURN, it was conservative in its submissions to offset certifiers, and once these parameters have been submitted to a crediting body, they are difficult to change. It is important to realize that supply and demand determine the price of offsets on the market rather than the program cost. BURN sells its carbon credits to different buyers at different prices, providing lower prices to corporate purchasers who buy in bulk. As the sale of one credit or 1,000 credits requires the same amount of administration, the recently increased prices on its website ensure the total cost of offset projects is covered, reflecting that most website sales are for one credit only. However, in this case, the marketed price of the credit is not meaningful: what matters is the total amount of money spent. Buyers who spend $100 on low-priced credits contribute the same amount to a project as those who spend $100 on high-priced credits. As a result, our calculations show a discrepancy between BURN’s sale price and the actual cost per CO2e averted, meaning that per Giving Green’s analysis, each offset sold by BURN avoids more than 1 ton of CO2e. Conclusions We believe that BURN stoves are strongly linked to reduced GHG emissions and improve the well-being of their owners. As with almost all offsets, we do not think offset purchases viably translate to a specific amount of CO2 removed. However, we believe that purchasing offsets enables BURN to distribute more stoves and directionally leads to fewer emissions. You can purchase offsets directly from BURN off their website through a corporate or individual option. We thank Peter Scott, CEO/Founder, Chris McKinney, Chief Commerce Officer, Andrew Weiner, Strategic Associate, and Molly Brown, Strategic Associate to Carbon at BURN Manufacturing for a series of conversations that informed this document. Endnotes [1] “The vast majority of the crediting is using flagship products, the Jikokoa Classic and the Kuniokoa.” “Distribution itself is done through a mix of direct and via partnerships.” BURN email correspondence, 2022-10-04 [2] “Carbon revenue is used to subsidize the cost of our stoves to a price that is affordable for the majority of families. We are targeting prices of $15-25 for Jikokoas and $0-10 for Kuniokoas.” BURN email correspondence, 2022-10-04 [3] “In Somalia for instance, we credit more per stove due to the less efficient baseline stoves, larger household size, higher rate of deforestation, and lower fuel-stacking.” BURN email correspondence, 2022-10-04 [4] https://www.aeaweb.org/articles?id=10.1257/aer.20210766 [5] “The vast majority of the crediting is using flagship products, the Jikokoa Classic and the Kuniokoa.” BURN email correspondence, 2022-10-04 [6] " Yes, in general our target markets remain the same across geographies” BURN email correspondence, 2022-10-04 [7] “The burning of such fuels, particularly in poor households, results in air pollution that leads to respiratory diseases which can result in premature death.” Ritchie and Roser, 2022. [8] Production: https://www.fao.org/3/i6934e/i6934e.pdf ; combustion: https://www.sciencedirect.com/science/article/abs/pii/S0961953402000089?via%3Dihub [9] BURN correspondence, 2022-11-15 [10] BURN correspondence, 2022-11-15 [11] In 2021 we used $50.85, which reflected the average cost in urban Kenya. BURN has begun expanding its operations to other countries and contexts and has noted that while it does not yet have an updated estimate for average cost, distribution in rural areas is significantly more expensive. To account for this, we have increased the cost by 50%, but we will revise this number when BURN generates an updated estimate.

Does direct air capture help reduce climate change? Read our independent analysis of DAC carbon removal. Direct Air Capture // BACK This report was last updated in October 2021. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Carbon dioxide (CO2) is the most abundant greenhouse gas (GHG) in our atmosphere. To combat the worst effects of climate change, we need to reduce the amount of CO2 that we produce. However, we will also need to remove the CO2 that already exists or will be difficult to abate in the near term. An important avenue for removing CO2 is direct air capture (DAC) . This is a process wherein a machine pulls CO2 from the surrounding air and, in many cases, permanently stores that CO2 underground to prevent it from contributing to warming our planet. Giving Green primarily recommends that individuals direct their donations to organizations pushing for policy change : the more CO2 mitigated, the less we have to remove via CDR. However, for individuals and businesses who prefer their donations to support immediate and certain GHG removal, we recommend one direct air capture firm, Climeworks , which offers a subscription service for individuals to support carbon removal directly from its website. DAC as a carbon "offset" DAC is part of the larger suite of carbon dioxide removal (CDR) solutions, both technological and biological, that remove carbon dioxide directly from the atmosphere. CDR is distinct from carbon capture, utilization, and sequestration (CCUS) , which generally refers to processes that capture concentrated CO2 at the source of emission, e.g. via a collector placed at the top of a smokestack, and the use of carbon captured in this manner. While a CCUS project reduces emissions after its installation and at the specific facility at which it is installed, at best resulting in a net zero facility, CDR projects do not need to be tied to an emitting facility and, if scaled widely, can result in net negative emissions; technological CDR methods are also referred to as negative emissions technologies (NETs). Thus, CDR has great promise in addressing the CO2 already in the atmosphere, or CO2 that will be emitted in the future from “hard to abate” sectors which are technologically or economically difficult to decarbonize. In the IPCC Special Report on Global Warming of 1.5ºC , released in 2018, “all analysed pathways limiting warming to 1.5ºC with no or limited overshoot use CDR to some extent”. However, CDR comes with challenges: carbon dioxide is much more dilute in the atmosphere than it is in a smokestack, making it difficult and often expensive to capture: for instance, forestry requires large amounts of land, and DAC requires large amounts of energy. We believe, as do most people working in the CDR space, that GHG mitigation should be our first priority, and that CDR is a necessity to reduce GHG levels beyond what mitigation alone can accomplish and avert the worst impacts of climate change. This report focuses on DAC projects as opposed to other types of CDR (forestry, soil carbon, enhanced weathering, etc) or other types of CCUS. DAC projects will typically use the harvested CO2 for commercial purposes or inject it underground with the sole intent of permanently removing it from the atmosphere. Projects that sequester CO2 are sometimes referred to as direct air capture and storage (DACS) or direct air carbon capture and sequestration (DACCS). Some of these projects inject the CO2 under thick layers of rocks to prevent it from leaking out. Others inject it into geological formations that react with the CO2 and turn it into a solid, thereby preventing it from leaking back into the atmosphere. Mechanism Giving Green generally prefers carbon removal projects to avoided emissions projects. DAC with sequestration is considered carbon removal. DAC without sequestration has elements of both avoidance and removal. In such projects, the CO2 may be sold as a commodity and replace CO2 that would otherwise have been produced for that commercial purpose, e.g. to provide the bubbles in a can of soda, or may be converted into another usable form, such as “carbon neutral” fuel. We focus primarily on DACS in this report, as causality and additionality claims are more complex when carbon is utilized and not sequestered. Causality There are a few elements to establishing causality of DACS projects (i.e., that the project directly leads to reduced atmospheric GHGs): Successful removal of carbon from the atmosphere Successful sequestration Minimal leakage of CO2 Minimal carbon intensity of energy required Byproducts of sequestration Successful removal of carbon from the atmosphere: DAC projects are technically difficult. Capturing CO2 from the air requires advanced technology that is in its early stages of development. Successful sequestration: DAC projects also need to show that they have sequestered the CO2 they captured, generally by injecting it underground. Minimal leakage of CO2: Even after CO2 has been sequestered, it may can leak back into the atmosphere. Many projects inject CO2 into geological formations from which it is unlikely to leak, such as underneath impermeable rocks. However, this is not foolproof; projects should have a method for tracking and preventing leakage from their sequestration sites. Minimal carbon intensity of energy required: The process of removing CO2 from the atmosphere and then sequestering it underground is energy intensive and, currently, fairly inefficient. While some amount of investment in this process should happen to increase the efficiency of the technology, the energy cost of running the DAC machines, and the carbon associated with producing that energy, must be considered against claimed GHG reductions. Byproducts of Sequestration: One method of sequestering CO2 is to inject it into oil wells to extract oil that cannot be extracted using normal means. This procedure is known as Enhanced Oil Recovery (EOR), and since EOR is by far the most valuable use for carbon dioxide, much of captured carbon is used for it. Whether or not EOR results in more or fewer emissions is a source of great controversy in the environmental community. If carbon sequestration is part of the production process, it can decrease the carbon footprint of oil. However, carbon capture may increase emissions in the long run by extending oil production beyond what would otherwise be financially tenable. Some reporting alleges that, of tax credits claimed for sequestration in the US under what is known as Section 45Q, 85-90% were used for OER, but only 5% were reported to the EPA for verification of said sequestration. Due to this uncertainty around EOR’s true climate impact, Giving Green does not recommend offsets that use DAC for EOR. Project-level additionality The CCUS market, which is much more mature than the DAC market, does not rely on revenue from carbon credits. Instead, the captured CO2 is primarily resold for other commercial uses (e.g. EOR or carbonated beverages). But DACS projects that sequester the carbon without commercial gain are likely to rely almost entirely on revenue from carbon credits or philanthropy. We see the market for DACS carbon credits as important for encouraging the growth of this industry and in funding specific projects to remove GHGs. The cost of DACS currently far exceeds the amount of money that comes in through carbon credits, meaning that most funding still comes from private capital looking for commercial uses or for eventual profits from carbon credits. We believe that most DACS projects would not continue in the absence of the ability to sell carbon credits as a whole; however, it is hard to directly tie your specific credit purchase to the viability of a given project. We thus view the additionality of most of these projects as mixed. Marginal additionality DAC projects have large up-front capital costs and large operational costs (such as electricity). DAC projects must keep a steady flow of revenue coming in to pay these operational costs, and therefore additional money from carbon credit purchases theoretically allows them to run the machines for more time. Also, some DAC projects are modular, so additional funds can be used to expand the system to capture more carbon. Since there is a very plausible path from additional offsets to additional carbon removed, most DAC projects score highly on marginal additionally. Permanence When CO2 is captured and successfully sequestered with a low likelihood of leakage, the permanence of this process is high. Projects in this sector have varying levels of permanence. We are skeptical of geologic sequestration and worry that the CO2 will eventually leak into the atmosphere. However, some projects use natural geological processes to convert the CO2 into a rock form. We see these projects as highly permanent. Co-benefits DAC projects do not tend to offer co-benefits. Cost-effectiveness Compared to other sectors, the expenses required to avoid or remove emissions through DAC are substantial. A significant part of these costs can be attributed to the relatively young technology that is expensive to engineer and maintain. We believe that the cost of DAC has the potential to drop sharply over time given enough support (e.g. via the purchase of carbon credits). For many technologies, a decrease in cost is observed as cumulative output of that technology increases; this empirical observation is referred to as technological learning. While the cost reduction happens via a variety of mechanisms, the core observation is that cumulative experience with a technology results in “learning-by-doing”, which over time, increases efficiency and lowers cost. Learning is greater in competitive industries and modular technologies, so modular forms of DAC may have higher potential for today’s funds to support quick learning. We explore this dynamic in a model, published here . As examples of the expected price trajectory of DAC: Climeworks has a roadmap to achieve $200/ton ; Carbon Engineering projects costs of $94-$232/ton ; McQueen et al 2020 identify scenarios achieving <$300/tCO2; Fasihi et al 2019 review and recalculate estimate from prior studies to find a range of $99-$388/tCO2; the US National Academies of Sciences assesses the potential costs of various DAC systems in depth and finds as low as $89/ton to be feasible; Lackner and Azarabadi describe a pathway to $100/ton for modular DAC systems. Giving Green’s Assessment of DAC While expensive relative to other carbon offsets, we see DAC projects as one of the most certain ways to remove CO2 from the atmosphere. We recommend one DAC project: Climeworks . Select Resources “Background Information about Geologic Sequestration.” EPA, Environmental Protection Agency, 6 Sept. 2016, www.epa.gov/uic/background-information-about-geologic-sequestration . “The Concept of Geologic Carbon Sequestration.” USGS , Mar. 2011, pubs.usgs.gov/fs/2010/3122/pdf/FS2010-3122.pdf . Brennan, S.T., Burruss, R.C., Merrill, M.D., Freeman, P.A., and Ruppert, L.F., 2010, A probabilistic assessment methodology for the evaluation of geologic carbon dioxide storage: U.S. Geological Survey Open-File Report 2010–1127 . Sundquist, Eric, Burruss, Robert, Faulkner, Stephen, Gleason, Robert, Harden, Jennifer, Kharaka, Yousif, Tieszen, Larry, and Waldrop, Mark, 2008, Carbon sequestration to mitigate climate change: U.S. Geological Survey Fact Sheet 2008– 3097. “What’s the Difference between Geologic and Biologic Carbon Sequestration?” What's the Difference between Geologic and Biologic Carbon Sequestration?, 2020, www.usgs.gov/faqs/what-s-difference-between-geologic-and-biologic-carbon-sequestration . Douglas W. Duncan and Eric A. Morrissey. “The Concept of Geologic Carbon Sequestration, Fact Sheet 2010-3122.” USGS Publications Warehouse, 2010, pubs.usgs.gov/fs/2010/3122/ . “CCS Explained.” UKCCSRC, 13 Dec. 2019, ukccsrc.ac.uk/ccs-explained/ . Roberts, David. “Pulling CO2 out of the Air and Using It Could Be a Trillion-Dollar Business.” Vox, Vox, 4 Sept. 2019, www.vox.com/energy-and-environment/2019/9/4/20829431/climate-change-carbon-capture-utilization-sequestration-ccu-ccs . “Geologic Sequestration in Deep Saline Aquifers.” Geologic Sequestration in Deep Saline Aquifers | EARTH 104: Earth and the Environment (Development), 2020, www.e-education.psu.edu/earth104/node/1094 . “Sequestration Map MIT.” Google Maps JavaScript, sequestration.mit.edu/tools/projects/ccs_map.html . Elliott, Rebecca. “Carbon Capture Wins Fans Among Oil Giants.” The Wall Street Journal, Dow Jones & Company, 12 Feb. 2020, www.wsj.com/articles/carbon-capture-is-winning-fans-among-oil-giants-11581516481 . Kintisch, Eli. “Can Sucking CO2 Out of the Atmosphere Really Work?” MIT Technology Review, MIT Technology Review, 2 Apr. 2020, www.technologyreview.com/2014/10/07/171023/can-sucking-co2-out-of-the-atmosphere-really-work/ . Peters, Adele. “We Have the Tech to Suck CO2 from the Air–but Can It Suck Enough to Make a Difference?” Fast Company, Fast Company, 17 June 2019, www.fastcompany.com/90356326/we-have-the-tech-to-suck-co2-from-the-air-but-can-it-suck-enough-to-make-a-difference . Rogelj, J., et al. Mitigation Pathways Compatible with 1.5°C in the Context of Sustainable Development. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. 2018. https://www.ipcc.ch/sr15/chapter/chapter-2/ . Lackner, K. S., & Azarabadi, H. (2021). Buying down the Cost of Direct Air Capture. Industrial & Engineering Chemistry Research, 60(22), 8196–8208. https://doi.org/10.1021/acs.iecr.0c04839 . National Academies of Sciences, Engineering, and Medicine. “Direct Air Capture.” In: Negative Emissions Technologies and Reliable Sequestration: A Research Agenda. The National Academies Press, 2019. https://www.nap.edu/read/25259/chapter/7 .

Forestry // BACK This report has moved! Please see Forestry for our general work on forestry interventions and Forestry Carbon Offsets for our work specific to forestry interventions as carbon offsets.

Preventing deforestation is important, but many carbon offsets that plant trees may not have a real impact. Forestry 2021 // BACK Summary Preventing deforestation is a key part of fighting the climate crisis, but forest carbon offsets suffer from a number of problems that make it difficult to know their true impact. It is difficult to measure the contribution of any forest offset project, as there is limited rigorous evaluation of the effectiveness of forest interventions. Of particular concern is “permanence”, which refers to the fact that in order to keep CO2 out of the atmosphere, trees must stay alive for many years. This adds an additional layer of uncertainty to any forest project that is very difficult to resolve. Given the limited evidence on the effectiveness of forestry interventions and concerns over leakage and permanence, we have not yet been able to find any forestry offsets we can recommend with confidence. We are continuing to look for high-quality forestry offset projects. This report was last updated in November 2021. This work is preliminary, and subject to change. Questions and comments are welcome. Overview Forest conservation, improved forest management, and afforestation/reforestation projects have gained popularity in recent years as “nature-based” solutions to fighting climate change. This makes sense, as deforestation contributes around 8% of the world’s annual CO2 emissions, and revitalization of forests can be a key carbon removal solution. Nature-based projects have received notable financial support from companies like Apple (launched a $200 million Restore Fund in 2021), Amazon (recently launched a $100 million restoration fund ), Netflix , and others to help achieve their net-zero climate goals. Globally, a recent initiative out of the World Economic Forum has even been established to plant 1 trillion trees by 2030 . This frenzy to support forest conservation and tree-planting comes as the world’s tropical forests lost 12.2 million hectares of tree cover in 2020 , a 12% increase from the year before. An area roughly the size of the Netherlands (4.2 million hectares) was lost within humid tropical forests in 2020 alone, and the rate of tropical forest loss looks like it will remain on pace in 2021 . The stunning rate of ongoing deforestation, leading to many degraded forests becoming carbon sources instead of carbon sinks , and the increased global attention to address this challenge warranted a deeper look into forest carbon offsets. Forestry as a carbon offset An analysis by Carbon Direct found that forest offset projects made up roughly 60% of carbon credits available in voluntary markets between 2015-2020. Forest offset projects generally fund NGOs working to protect or increase forest cover. There are three types of projects . The first type – avoided conversion or reducing emissions from deforestation and forest degradation including conservation and enhancement of forest carbon stocks (REDD+) – identifies forested land that is under threat of deforestation and takes specific actions to prevent deforestation from happening. REDD+ is a United Nations backed framework to stop the destruction of forests (the “+” in “REDD+” signifies the added importance on conservation and enhancement of forest carbon stocks). REDD+ helps countries value forests on the basis of the carbon and ecosystem benefits they provide and establishes financial incentives for countries to not cut down forests. The second is improved forest management (IFM) projects that involve working with local communities to use improved land management techniques to maintain or increase carbon stock in a forest. The last type of project involves increasing forest cover by planting trees in previously non-forested areas (also known as “afforestation” or “reforestation”). Mechanism Forest projects have the potential to both remove CO2 and avoid CO2 emissions. For live trees, photosynthesis pulls CO2 and water from the environment and produces oxygen and glucose in return. Much of this carbon is stored in the wood of the tree, sequestering it from the atmosphere as long as the tree is alive. Carbon is also stored in other above ground biomass as well as in the soil. Once a tree dies, its biomass eventually decomposes, releasing some carbon back into the atmosphere. Projects that claim to avoid deforestation or maintain existing carbon stocks in forests are considered avoided emissions, because they prevent the release of greenhouse gas (GHG) emissions from a forested area. Alternatively, IFM projects that claim to increase carbon stocks in a forested area may be considered carbon dioxide removal, as they attempt to enable a forested area to remove more GHG from the atmosphere than they did previously. Carbon Direct estimates 75% of IFM projects on voluntary carbon markets are avoided emissions projects and the rest could be considered both avoided emissions and removals.Finally, afforestation and reforestation projects also claim to remove carbon dioxide (CO2) from the atmosphere by planting trees where they were previously cut down or did not exist before. Causality Unfortunately, it is hard to know the net contribution of any tree or forest to global carbon dioxide or global warming. This recent article in the journal Nature discusses the difficulty of assessing the effect of trees on climate change. While direct carbon capture likely has a cooling effect, trees emit other gases (including methane) into the atmosphere , some which may have warming effects. Additionally, trees can affect warming through changing the earth’s reflectivity of sunlight (known as an “albedo” effect). For example, conifers with dark leaves in far northern forests tend to absorb a lot of heat relative to highly reflective snow cover, reducing or even eliminating the positive effects of their carbon capture. This research is highly controversial, and many climate scientists believe that increasing forest cover is a key tool in fighting climate change. However, it is safe to say that our understanding of the relationship between trees and climate is still evolving and will improve with more direct measurement. Even under the assumption that increasing the number of trees unambiguously fights warming, establishing the causality of any given forest project on carbon sequestration benefits that qualify as additional (beyond business as usual) can be difficult. For example, some forest offset projects aim to prevent deforestation by paying landowners to not cut down their trees - but how can you really know that they would have cut down the trees without the credit? Organizations like Verra and Gold Standard that sell offsets set detailed standards and require projects to document the history of the land and suggest what would have happened in the absence of credits. But there is limited rigorous evidence using valid counterfactuals on the effect of forest interventions. In fact, it was recently discovered that many forested areas that were never under threat of being cut down were sold and marketed to major offset buyers. In another investigation , systematic over-crediting of forest offsets under California’s forest offset program was uncovered and was estimated to amount to 30 million tons of CO2 worth $400 million. The over-crediting was the result of project developers overstating the climate benefit by creating faulty counterfactual baselines. Without a convincing counterfactual it is hard to trust claims of the amount of change in forest cover. Forest projects can also suffer from “leakage” – the concept that preventing deforestation in one area may just cause it to increase in other areas. This is likely true if the underlying demand for non-forested land is not addressed. For example, a project in Brazil might seek to protect a certain forested area from being converted to pasture land, but if the ranchers’ demand goes unmitigated they will likely just shift their activities to another forest where the project is not operating. Whether or not there is leakage in a given project depends heavily on the underlying reason for deforestation, as well as the outside options for the people who are demanding the deforestation. Forest carbon offset projects do not try to directly measure greenhouse gas emissions or quantify other contributions to warming, presumably because doing so would be prohibitively expensive. Instead, program staff model carbon capture based on the number and type of trees planted, managed, or conserved. But project developers face the incentive to exaggerate claims about the number and type of trees, as well as various forest management practices that affect net carbon reduction. Agencies such as Verra address this by requiring periodic audits, but these are generally contracted by the program implementer, which presents a conflict of interest. In the public policy literature, there are few rigorous impact evaluations of forest interventions. One exception is a recent RCT by Jayachandran et. al. (2017) published in the journal Science. This RCT studied a program in Uganda in which farmers were paid to not cut down their trees. They indeed found decreased deforestation compared to control areas, and established that leakage was unlikely to be occurring. Another study of a government-run payments for ecosystems (PES) program implemented in Mexico that compensated communities for protecting ecologically valuable land resulted in a reduced rate of tree cover loss in areas enrolled in the program compared to areas that were not. Some areas at particularly high risk of deforestation saw reductions in tree cover loss by 40%, though overall rates of observed forest cover change were low. A more recent study mapping over 400 tree plantations in India planted between 1980 and 2017 raised serious questions about the success of tree planting and forest restoration campaigns, finding no change in tree canopy cover across the plantations studied. Potential reasons for this could be low survival rates of planted trees and tree planting where canopy cover is already dense. A review of 12 localized REDD+ (Reduced Emissions from Deforestation and forest Degradation, and enhance carbon stocks) projects found mixed outcomes in terms of increased carbon stocks, with the diversity of interventions across projects making it difficult to understand the drivers of differential effects. Overall, it is difficult to validate the causality of any given forest project and for that reason, causality is assessed as low (or at least uncertain)for many forest projects. Companies have emerged to better track forest activities, estimate CO2 levels, and identify leakage using satellite imagery, LiDAR imaging, and artificial intelligence, but it is still too early to determine whether these technologies can address causality concerns successfully at scale. Project-level additionality In general, forest conservation programs are run by NGOs dependent on outside funding or private sector project developers. For NGO-run projects, it seems reasonable to assume that income from offsets are directly fueling project operations, allowing more activities than without them. For these projects, we assess project-level additionality as high . However, sometimes forest offsets are related to enterprises hoping to make a profit by selling lumber. In these cases, it is possible that the enterprise was profitable without offsets, and therefore may not satisfy project-level additionality. Marginal additionality Forest projects generally need continual revenue flow to keep operating, and can use additional funding to expand their operations. We therefore believe that a well-functioning forest project is likely to satisfy marginal additionality. A well-functioning forest projects would, however, need to demonstrate that offset revenues resulted in protection of areas that would have been deforested or resulted in new carbon stocks added each year . Long-running project may claim continued credits since without the project, more and more of the forest would have been degraded each year. But this is very difficult to verify. Further, the vintage of the forest offset project must be taken into consideration as well. Vintage refers to the year the emissions reduction actually took place. For forest projects where emissions reductions actually took place many years in the past we would assess the marginal additionality as low. Permanence Trees capture and store carbon as biomass as the tree grows. This carbon is not eliminated, but converted into tree matter and fixed to the soil, and if the tree dies and decays (or burns) it will be released back into the air. The ability of trees to reduce atmospheric carbon depends on their survival over decades. If trees that are planted or conserved end up getting destroyed in the future, most benefits of the project are lost (except a delay in GHG emissions). Risks to permanence can be unintentional (such as fires and pests), or intentional (such as logging). To address the risks of such “reversals”, voluntary certifying agencies such as Verra assigns risk score to forest projects and require a risk-related proportion of credits to be put into a risk buffer pool. However, it is unclear whether future monitoring of reversals will be adequate, and if the buffer pool will be enough to account for them. For instance, a recent report by the non-profit CarbonPlan calls into question whether the buffer pool in forest offsets in California’s cap and trade market is sufficient given increased susceptibility to forest fires. Meanwhile, over 150,000 acres of forested areas along America’s West Coast previously used as forest offsets have burned to the ground this past summer alone. Additionally, a recent article by the investigative journalism organization ProPublica looked into a myriad of forest conservation offset projects, and came to the following conclusion: “In case after case, I found that carbon credits hadn’t offset the amount of pollution they were supposed to, or they had brought gains that were quickly reversed or that couldn’t be accurately measured to begin with. Ultimately, the polluters got a guilt-free pass to keep emitting CO₂, but the forest preservation that was supposed to balance the ledger either never came or didn’t last.” The conservation program studied in Jayachandran et al (2017) only lasted two years, so they address permanence questions in their article. The authors do not make a claim of permanence- instead they assume that deforestation will likely resume once the program ends, and therefore the benefits of project come from delaying the deforestation. While they do find that the program is cost-effective even when only considering a delay in deforestation, this conclusion comes from a complicated calculation relying on an assumed discount rate and evolution of the social cost of carbon over time. The parameters chosen in this calculation are controversial, and therefore we don’t have a high degree of confidence that a short-term program would be cost effective. To permanently offset carbon emissions the program would have to be run in perpetuity, making the cost of the offset prohibitively high. Permanence is an important consideration because, once emitted, CO2 can remain in the atmosphere for anywhere between 300 and 1,000 years . It is therefore questionable for forest projects to credibly claim long-term climate benefits if there is a high risk of reversing advertised benefits within a timespan of a few years or even a few decades. Overall, permanence is a persistent issue in forest projects, as it is very difficult to permanently guarantee an emissions reduction with a temporary project. As a result, we assess permanence of many forest offset projects as low . Cost The average price of forest offsets within voluntary carbon markets was $4.73 per ton as of August 2021. However, most forest projects are avoidance-based, so this price mostly reflects the price of avoidance projects. Projects that provide carbon removal tend to be much more expensive as they require significant effort to plant and maintain new trees. According to Forest Trends Ecosystem Marketplace, afforestation and reforestation projects that claim carbon removal benefits have an average price of $8.10 or roughly twice that of the average forest offset. While these prices are low relative to other forms of emissions avoidance and carbon removal, their true cost is difficult to assess given questions about causality and permanence. On causality, most projects establish buffer pools that are not sold as offset credits to account for a percentage of trees dying during the life of a project. Recent reports suggest that typical buffer pools put in place (10-20% of the total project) are straining as wildfires, disease, and pests multiply. Increasing these buffer pools would significantly increase cost. On the permanence front, CarbonPlan recently developed a tool to estimate the equivalent cost of making a temporary project’s carbon removal benefits permanent. Assuming the temporary project (e.g. afforestation/reforestation) lasted 20 years which was subsequently renewed by another 20-year project and repeated for 1,000 years, with a 10% annual risk of project failure (e.g. due to forest fires), and applying a 3% discount rate on future costs, buyers should budget around $37/ton for a project that costs $8/ton today in order for it deliver carbon removal benefits on a 1,000 year basis. In practice, delivering those permanent benefits by sequentially implementing projects for 1,000 years each with a 20-year duration would prove to be difficult. Assuming after 60 years of renewing 20-year long projects, the project is replaced by a direct air capture project with permanent carbon removal at a cost of $200/ton (well below today’s average cost for our recommended permanent carbon removal providers), the budgeted price increases to $65/ton (plus or minus $9), much higher than the advertised $8/ton price. Buyers should be aware that challenges with the permanence and causality of forest projects are not reflected in their cost. Co-benefits Co-benefits to forest projects may include ecosystem conservation, biodiversity, and recreation. Some projects can increase income-generating opportunities, while others can hinder these opportunities from local inhabitants, depending on land tenure and other considerations. Co-benefits can vary widely from project to project, meaning that co-benefits will need to be assessed on a project to project basis. Assessment of forestry projects Overall, our assessment of forest projects puts us in a difficult situation. Conserving forests is a clear necessity in the fight against climate change, and there is no reason to believe that this conservation will happen based on market forces. Therefore, there is a need for additional funding for conservation, and the offset market could be a good way to achieve this funding. For a high-quality project, it’s likely that funding conservation is one of the most cost-effective ways to lower GHG emissions. However, assessing the causal impact of any offset on GHG reduction is extremely difficult, and we do not believe that the certification procedures put in place by the offset certifiers give a high enough level of certainty to trust any specific project. We are not the only ones to come to this conclusion on forest offsets. For instance, a guide to assessing the validity of carbon offsets by Broekhoff et al (2019) categorizes forest offsets as being “higher risk” of being low quality due to concerns about additionality and permanence. While quality forest projects certainly deserve funding, it may just be that the offset market is not the correct mechanism to deliver this funding. Offsets require high standards of certainty that it is very difficult for forest projects to meet. Finding the right forest project Forest offsets are one of the most popular offsets available in voluntary carbon markets. The numerous projects behind these offsets vary significantly in terms of quality, cost, and co-benefits. The popularity, variety, and challenges associated with forest offsets prompted us to think about what features we would expect to see in a forest offset project that would make us confident in recommending it. We determined such a forest project would need to demonstrate the following: 1. Causality: The project would need to show a clear causal impact, meaning: a. A clearly identified counterfactual that shows deforestation happening without the project, or lower carbon stock in the forested area without IFM or afforestation interventions b. Sophisticated analysis demonstrating that leakage is not happening c. Takes place in geographies where albedo affect is not a concern (e.g. tropics) 2. Marginal Additionality: The project is currently active and the funding received is applied towards continued advancement of the specific climate benefits claimed. 3. Permanence: The project demonstrates low risk of reversal, and has means of monitoring reversals. Specifically, the forested area would need a track record of low risk of forest fire or widespread disease. Permanence risks are addressed by a strong buffer pool. 4. Cost: Acknowledging there will always be limitations to permanence with forest-based projects, the costs would have to be low enough to demonstrate that over a 1,000 year period, it would still be more cost-effective than methods of permanent carbon dioxide removal (tools like Carbon Plan’s permanence calculator can help calculate this). 5. Co-benefits: The project does not harm or disrupt the livelihoods of individuals living in nearby communities. Closing the quality gap Recently, new approaches and technological innovations have been leveraged to improve on some of the challenges underlying many forest projects. The following organizations are on the leading edge of addressing some of these problems: Pachama is a broker of existing forest avoidance and removal-based offset projects that uses LiDAR imaging and satellite imaging to estimate biomass volume and carbon stock in a project’s forested area. The company uses machine learning models to estimate counterfactuals (if there were no carbon offset project) and uses radar data to monitor changes in forest cover to detect instances of deforestation. The company also monitors leakage risk for forested areas surrounding a project. Based on these analyses, Pachama identifies certified forest carbon credits where it believes the underlying assumptions are particularly credible and resells them on its marketplace. Pachama’s technologies could help improve measurement of the causal impact of a forest project, but gaps still remain in accurately measuring carbon stock, fully eliminating counterfactual concerns, and addressing permanence issues. Jurisdictional REDD+ (reducing emissions from deforestation and forest degradation) builds on previous REDD+ initiatives that were designed to offer incentives to developing countries to reduce emissions from forested lands and improve sustainable management of forests. Jurisdictional REDD+ refers to an accounting framework that establishes consistent baselines and carbon crediting approaches across forest projects within a jurisdiction like a state or country. Proponents believe that taking a jurisdictional approach to REDD+ reduces the risk of leakage, so that efforts to preserve forests in one area do not lead to increased deforestation in another. Initiatives like Architecture for REDD+ Transactions (ART) are developing standardized procedures to improve the integrity of crediting emissions reductions and removals in REDD+ projects, and enhancing comparability across jurisdictions. Project developers like Emergent serve as an intermediary between tropical forest countries and the private sector to facilitate transactions that meet ART’s verification standards. NCX utilizes forest mapping techniques to make an accurate prediction of carbon stock across US forests, and then facilitates an exchange between landowners and offset buyers to defer timber harvests. NCX’s key technological innovation is a detailed “basemap”, that provides estimates of predicted deforestation for every plot of forested land in the United States. These predictive estimates of deforestation provide the estimates of avoided emissions from landowners who join NCX. Aside from claiming to quantify carbon stock more accurately, NCX has a unique approach to permanence. Their projects only delay tree-cutting by one year, and they sell a guarantee of this delay to credit purchasers. They then claim that delaying tree-cutting on 31 acres for one year is equivalent in terms of avoided emissions to permanently avoiding tree-cutting on one acre. NCX attempts to address leakage concerns by requiring landowners to enroll their entire properties on their platform and makes their platform available to small landowners. While all of these advances are laudable, we still have concerns about the project attracting landowners who were not going to cut down their forests, market-level leakage, and the actual value of one-year contracts. Each of the above organizations and initiatives attempt to address different challenges, from causality and additionality to leakage and permanence. Giving Green intends to dive further each of these solutions, and follow their progress as they continue to improve. We hope that advances in technology will eventually allow the market to produce reliable forest offsets. References Broekhoff, Derik Gillenwater, Michael Colbert-Sangree, Tani Cage, Patrick “Securing Climate Benefit: A Guide to Using Carbon Offsets”, November 2019, http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf Jayachandran, S., De Laat, J., Lambin, E. F., Stanton, C. Y., Audy, R., & Thomas, N. E. (2017). Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation. Science, 357(6348), 267-273. https://science.sciencemag.org/content/357/6348/267 Popkin, Gabriel (2019) How Much Can Forests Fight Climate Change? Nature 565, 280-282 (2019) https://www.nature.com/articles/d41586-019-00122-z Song, L., & Moura, P. (2019). An (even more) inconvenient truth: why carbon credits for forest preservation may be worse than nothing. ProPublica. https://features.propublica.org/brazil-carbon-offsets/inconvenient-truth-carbon-credits-dont-work-deforestation-redd-acre-cambodia/

Destroying ozone-depleting substances can offset carbon emissions. We recommend one ODS-related carbon offset. Ozone Depleting Substances // BACK This report was last updated in February 2022. The most up-to-date version of this report was published in November 2022 and covers refrigerant destruction in general , of which ODS destruction is a subset. Summary Certain gases used as refrigerants and foams are classified as “Ozone Depleting Substances”, or ODS. When they enter the atmosphere, these gases can warm the earth at a rate orders of magnitude above carbon dioxide (CO2). Although the production of many of these gases is banned under the Montreal Protocol, large quantities of ODS still exist in appliances or stockpiles. If these gases are not properly disposed of, most will eventually leak or be released into the atmosphere. Organizations can find and destroy these gases, generating emissions credits in the process. We find these offsets to be among the most credible on the market. We currently recommend one ODS-destroying organization, Tradewater , which sells offsets directly from its website. Overview Although CO2 is the most well-known greenhouse gas (GHG), other substances released into the atmosphere by human activity also have warming potential. Some of the most powerful warming gases come from refrigerants and foams and can have up to 10,000 times the warming effect of CO2. These include chlorofluorocarbons (CFCs) and hydrofluorocarbons (HFCs), which are sometimes found in aerosols, refrigerators, and air conditioners. As many of these substances deplete the ozone layer, they are frequently described as “Ozone Depleting Substances” (ODS). Production of these chemicals is banned under the universally ratified Montreal Protocol, including the Kigali Amendment in 2016. But large quantities still exist, and the use of pre-existing ODS is not banned in most countries. If not destroyed, ODS will continue to leak from appliances and storage containers, entering the atmosphere and adding to warming. Project Drawdown identifies refrigerant management as one of the most promising interventions to reduce warming. In theory, ODS destruction is a good fit for carbon offsetting. ODS destruction has no commercial value, so it is unlikely to occur in the absence of further government regulation, philanthropic donations, or carbon offsets. At this time, plenty of existing ODS still needs to be found and destroyed. Because ODS destruction projects can be ramped up semi-linearly with funding—i.e. they do not require large upfront capital investments but instead utilize a certain amount of funds per unit of ODS destroyed—revenue from selling offsets from a previous project can easily be reinvested in future ODS destruction. Mechanism ODS destruction projects are considered emissions avoidance , as they prevent emissions that would have occurred had the ODS leaked into the atmosphere. Casuality There are a few elements to establishing causality of ODS destruction projects: Conversion of ODS into less harmful substances Establishing the counterfactual of ODS release into the atmosphere Ensuring that destruction of ODS does not lead to more production of harmful gases Accounting for the carbon footprint of the removal activities We tackle each in more detail below. Conversion of ODS into less harmful substances ODS destruction projects reduce GHGs by incinerating the ODS. While measuring the exact amount of gases destroyed is straightforward, converting this into the amount of CO2-equivalent gas removed requires understanding the “global warming potential” (GWP) of both the ODS and the byproducts of ODS incineration. These have been established by the IPCC , who are consistently updating their lists of conversion factors. Depending on the gas being destroyed, incinerating ODS can lead to thousands of times less warming over a hundred years than simply letting the gases escape. Establishing the counterfactual of ODS release into the atmosphere If not destroyed, would ODS have been sequestered indefinitely in canisters and appliances, or would it leak into the atmosphere and cause warming? Even under the best conditions, many ODS storage containers will slowly leak, and improper end-of-life disposal of appliances can result in complete release. Offset certifiers have standard assumptions for leakage over time. For instance, the Verra protocol allows projects to claim 100% of destruction to be additional when ODS are recovered from appliances at their end-of-life; for canisters that could be reused or stored, projects may estimate expected cumulative leakage over ten years and claim that share of destruction as additional. We believe these are reasonably conservative assumptions and accept them for offset projects that we analyze. Ensuring that the destruction of ODS does not lead to more production of harmful gases Finally, we may worry that destroying these gases might cause similar chemicals to be produced to meet the demand for this type of gas, a phenomenon termed “leakage.” Since production of these gases is banned in all countries under the Montreal Protocol, they cannot be reproduced, but they might be replaced with non-banned gases that also have warming effects when released into the atmosphere. This is not a problem with refrigerants captured from end-of-life appliances, but it could be an issue for stockpiled gases. Accounting for the carbon footprint of the removal activities Finding and incinerating ODS can require travel and shipping, which in itself can lead to CO2 emissions. However, these life cycle emissions are generally taken into account by the offset certifier when calculating the total emissions reduced. Project-Level and Marginal Additionality There is no other market for ODS destruction. Additionality is much more straightforward to establish for ODS projects than for other carbon offset sectors. Most countries do not have any regulations on the use and destruction of existing ODS, even if their production is banned under the Montreal Protocol. Since no market exists for the destruction of these gases apart from the carbon offset market, ODS destruction projects have to rely on offsets to survive. Permanence When ODS are destroyed, their contributions to warming are permanently removed. Reversal is not a concern. Co-benefits ODS projects do not generally offer any co-benefits, but preventing ODS from escaping into the atmosphere can prevent damage to the ozone layer. Cost-Effectiveness Giving Green has only found one organization selling ODS destruction offsets to the public, Tradewater. We investigate their cost effectiveness in our recommendation. Assessment of ODS projects We find ODS destruction carbon offsets to be one of the more compelling types of carbon offsets available. We have only found one ODS offset that we recommend, which is provided by Tradewater .

How do carbon offsets work, and why do some offsets fail to actually reduce carbon emissions? Overview of the Voluntary Carbon Market // BACK Summary In this document, we give a very brief overview of how carbon markets work, and why they may lead to supporting projects that do not reduce emissions. We also show why the stated purpose of offsets—to provide a verifiable reduction of a specific amount of greenhouse gas (GHG) emissions—is rarely attainable. But even if validating the exact amount of emissions reduction tied to a carbon credit is an unrealistic goal, purchasers can still direct their investments towards projects that are likely making some positive difference in the fight against climate change. For organizations that have the flexibility to make climate impact through charitable donations as opposed to purchasing carbon credits, we suggest donating to Giving Green’s recommended US policy organizations , as we believe that these policy organizations have more expected impact than even the best of carbon offsets or removals. This report was lightly updated in November 2022. The prior version of this report was published in October 2021. We may do a more detailed investigation of this area in the future. Carbon Markets and the Certification Process Types of carbon markets Let’s start with some definitions. The carbon market is generally split into two parts. The compliance market is for offsets associated with international pacts such as the Kyoto accords and national or regional cap and trade systems (such as the California Cap-and-Trade Program). These frameworks each have their own rules for certifying offsets. The other part is the voluntary market , which provides offsets for individuals and businesses to purchase on their own accord. This might be for an individual looking to offset their flight, or for businesses looking to brand themselves as “carbon neutral.” The vast majority of the demand for offsets comes from businesses. We focus on the voluntary carbon market in this analysis, though many of the conclusions also hold for the compliance market. In the voluntary market, there are no set rules for who can establish and sell offsets: any project developer can sell an offset as long as they can find a buyer. However, in practice, the vast majority of offsets that change hands in this market are validated by an established certification body. These certification bodies are supposed to provide certainty to offset purchasers that the offsets are actually representing avoided emissions. One certification option is the United Nations’ Clean Development Mechanism, which was established to certify international offsets to be used under the Kyoto Protocol, but now also provides certifications to the voluntary offset market. However, CDM projects are almost exclusively associated with compliance markets. According to Allied Offsets , the largest certification providers by number of listed projects as of September 2021 are Gold Standard (2,218 projects), Verified Carbon Standard (2,132), Climate Action Reserve (652), and American Carbon Registry (484). An analysis in April 2021 by Carbon Direct found that offset projects across these registries represent 1.1 billion tons of CO2 that is claimed to be avoided, reduced, or removed. The recent flurry of net-zero commitments in the past few years across industries has fueled newfound interest in carbon markets. McKinsey found that the number of corporate net-zero commitments doubled between 2019 and 2020 and estimates that the demand for carbon credits could increase by a factor of 15 by 2030, leading to a total carbon credit market value of more than $50 billion. The growing interest in carbon offsets has stimulated a number of institutions to improve the integrity of carbon markets and better define what role they have in a net-zero world. The Science-based Targets Initiative (SBTi) , a partnership between CDP, the United Nationals Global Compact, World Resources Institute, and the World Wide Fund for Nature (WWF), helps companies establish science-based emissions reduction targets aligned with climate science to limit global temperature rise well below 2 degrees Celsius above pre-industrial levels. SBTi’s target setting criteria does not allow for offsets to be counted as emissions reduction towards a company’s science-based targets. SBTi requires participating companies to reduce emissions within their own operations and value chains without the use of traditional offsets, with the potential exception of carbon removal to address hard-to-abate, residual emissions. On the other hand, a private-sector led initiative known as the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) was established to scale up carbon markets and try to improve the integrity and functioning of these markets. The TSVCM has established working groups consisting of offset suppliers, verification bodies, NGOs, regulators, academia and other stakeholders to address gaps in voluntary markets relating to governance, legal frameworks, and carbon credit integrity. While the TSVCM is the largest effort to address these gaps, the initiative has been criticized for not going far enough in addressing the many quality issues inherent in today’s carbon offsets. For instance, critics have noted that they are attempting to commoditize a sector where carbon offset projects vary significantly across a variety of factors including additionality and permanence. Finally, Oxford University recently published a set of principles to help offset buyers understand what types of offsets are acceptable and under what conditions should they be used. The “Oxford Offsetting Principles” encourage buyers to prioritize cutting emissions and, when using offsets, to shift to carbon-removal-based offsets with long-lived storage over time. The Oxford principles attempt to stake a middle ground, recognizing a role for offsets in achieving net-zero targets while encouraging buyers to use offsets sparingly and providing guidance on how to support “net-zero aligned” projects. The carbon offset certification process How does the certification process work? Each of the certification organizations has pre-determined methodologies and calculations that project implementers need to use in order to validate that they provide real emission reductions. Applicants are required to provide certain inputs (i.e. the amount of power provided by a wind farm, etc.) along with justifications for these assumptions (frequently using some data they have gathered). These inputs go into a model, which determines how many credits they will receive for the project. Applicants also must provide evidence that the project would not be completed without the carbon credits, and that the emissions reductions are not being claimed twice. Although applications are typically done before a project is implemented, actual credits are generally not issued until after the emissions reduction is “verified,” which typically happens annually. The project implementer has to verify key assumptions of the model, and this verification is then “validated” by the certification agency. Only after completing this process is the project granted emission credits. The next step is for the project to sell these credits as offsets. Some projects have pre-committed buyers, set up through “Emissions Reduction Purchase Agreements” (ERPAs). Some projects sell their offsets directly to buyers through retail sites. For instance, Gold Standard provides a platform for certified projects to sell offsets directly to consumers on its website. However, the vast majority of offsets are instead transferred to brokers such as ClimateCare , South Pole , or CO2balance . These brokers work with clients (typically large corporations) to provide bespoke offset packages. Since brokers control the majority of the offset market, it can be hard for individuals to access the full spread of offset options. Some projects are not certified at all, and have circumvented registries altogether. This is largely due to the absence of a certification protocol for specific climate mitigation solutions, and is particularly applicable to non-forestry projects that claim to remove GHGs from the atmosphere. In some cases, the costs of thirdparty verification and certification may be too costly relative to the size of the project. In the absence of third-party verifiers, climate change research organizations like CarbonPlan conduct their own due diligence on carbon removal and carbon avoidance projects; CarbonPlan has made their findings available on a public database . However, these assessments are not often conducted at project sites and are based on information that providers make publicly available. Further, major carbon removal purchasers like Microsoft, Stripe, and Shopify conduct their own due diligence on providers and have made project proposals publicly available, like this repository by Stripe on GitHub . While these assessments are a valuable source of information, it is important to note that much of this due diligence is based on publicly available information and claims made by project developers that have not been verified on site. The price of offsets is simply determined by supply and demand in the market, with sellers of offsets trying to get the best price they can receive while still making sales. This is an important note. Many people may assume that if a project cost, say, 1 million USD and prevented a million tons of CO2 emissions, then each offset would be priced at $1. But this is not true. The amount of revenue gained from offsets can be a small proportion of the costs of running a project, or can result in additional profits for revenue-generating projects. This can be problematic, as it is difficult to figure out how much of the emissions reduction of the project (if any) can really be attributed to the offsets. We discuss this further in the report. Reliability of Certified Offsets Criticism of certified offsets Even certified offsets have received a lot of criticism. For instance, the investigative journalism organization ProPublica looked into a myriad of forest conservation offset projects, and came to the following conclusion : “In case after case, I found that carbon credits hadn’t offset the amount of pollution they were supposed to, or they had brought gains that were quickly reversed or that couldn’t be accurately measured to begin with. Ultimately, the polluters got a guilt-free pass to keep emitting CO₂, but the forest preservation that was supposed to balance the ledger either never came or didn’t last.” Additionally, a detailed assessment of the UN’s Clean Development Mechanism determined that “CDM still has fundamental flaws in terms of overall environmental integrity” and that “85% of the projects covered in this analysis … have a low likelihood that emission reductions are additional and are not over-estimated.” Since the other certification agencies have based much of their certification protocol on CDM standards, this does not bode well for the industry as a whole and has real-world implications in addressing climate change. In the forestry sector, a recent analysis by ProPublica, MIT Technology Review, and CarbonPlan shed light on systematic over-crediting in almost 30% of carbon credits under California’s regulated carbon offset program representing 30 million tons of CO2e worth $410 million. CarbonPlan recently found a lack of rigorous standards to ensure good outcomes in an assessment of all of the soil carbon credit protocols developed by carbon registries and other institutions. A white paper by Compensate found that after analyzing 100 certified offset projects, 90% failed to meet their offsetting claims, were not permanent, or resulted in negative side-effects for local communities and ecosystems. These examples demonstrate that certified projects are not at all fool-proof, and purchasing poor-performing certified offsets in an effort to negate individual or corporate GHG emissions can even do more harm than good. Although the certification agencies play an extremely important role in identifying projects that have a plausible path to impact, they do not give enough certainty to allow us to recommend all certified offsets. There seem to be many opportunities to game the system, and we do not believe that certification alone is enough to guarantee that purchasing offsets will result in true emissions reductions, especially not of the stated magnitude. We conduct our own due diligence to find projects in which we are confident that the purchase of a credit yields climate benefit. Giving Green’s Approach to Recommending Offsets & Removals When does Giving Green recommend an offset or removal? In this section, we explain Giving Green’s approach to assessing carbon offset and removal projects and determining which ones to recommend. We are searching for projects where there is a direct, causal, and verifiable link between someone purchasing a carbon credit and a decreased amount of greenhouse gases (GHGs) in the atmosphere. First, we look at the offset market sector by sector, to determine which sectors are most likely to provide reliable offsets. For sectors that we determine to be likely to contain high-quality offset projects, we then search through available projects and recommend those that meet our criteria. We rate projects using seven categories: mechanism, causality, cost, project-level additionality, marginal additionality, permanence, and co-benefits. Note that our project recommendations are not comprehensive—we have not assessed all projects in the market. (In fact, many projects do not have any publicly available information!) We have developed a systematic approach to assessing projects, and recommend the best ones we find. As our research continues, we expect to find more projects to recommend. A note to offset and removal providers: if you believe your project would meet our quality bar using the methods described below, please do feel free to reach out to us! For organizations that have the flexibility to make climate impact through charitable donations as opposed to purchasing carbon credits, we suggest donating to Giving Green’s recommended policy organizations, as we believe these have more expected impact than even the best of carbon offsets. Sector-level analysis We begin by conducting analyses at the sector level, since offset projects in the same sector tend to have similar strengths and weaknesses. For each sector we review (such as forestry, renewable energy, etc.), we produce a sector research report, in which we discuss the logic for offset projects in the sector, and determine whether we believe the underlying projects are likely to be reliable. We generally proceed by working through the certification process for an example offset project. In this process, we show what data must be provided by the project developers, and what assumptions are accepted by the certification agencies. We then discuss whether we believe these assumptions, consulting the literature to validate them. Based on this analysis, we determine if the sector appears to be promising for high-certainty projects. If so, we search for specific projects to recommend. If we determine that a sector is not promising, that does not necessarily mean that there are no high-quality projects in the sector. But given our limited research resources, we have simply concentrated our search for projects on what we consider to be the most promising sectors. We are open to finding high-quality projects in all sectors, and will consider projects in less promising sectors if they seem to be of exceptional quality. Project-level ratings After performing sector-level analyses, we then analyze and rate specific projects in promising sectors. We search for offsets to consider by assessing projects from open calls for proposals from major offset purchasers like Microsoft, Stripe, and Shopify as well as reviewing publicly-available marketplaces selling offsets. We concentrate our search among projects that were easy to purchase online and where detailed information on the projects they support was available online. We rate offsets using seven main categories: mechanism, causality, project-level additionality, marginal additionality, permanence, cost, and co-benefits. These are summarized in the below table. For each project that we analyze, we rate each of these categories as ‘High’, ‘Medium’, or ‘Low’. In order to be recommended, projects need to make a compelling overall case that purchasing carbon credits reduces emissions. However, they do not have to score highly in all categories to do this. We elaborate on this in our explanations of each metric below. Mechanism Mechanism refers to the type of climate benefit a project offers. A project may offer “avoided emissions” or “carbon removal” climate benefits, and some projects can even offer both. Avoided emissions projects reduce or prevent additional GHGs from entering the atmosphere. For example, renewable energy projects or clean cookstove projects reduce GHG emissions when they are deployed instead of higher polluting alternatives. The climate benefit is that GHG emissions are reduced, or avoided altogether. More recently, projects that offer carbon removal benefits have gained in popularity. These projects claim to remove CO2 from the atmosphere and store it away over short or long time horizons. Afforestation or reforestation projects, or efforts to improve soil’s carbon storage capacity, are common nature-based carbon removal projects. Technological solutions like direct air capture (DAC), which uses machines to remove CO2 from the atmosphere and store it away in geologic formations, have just begun commercial deployment. We assess carbon removal projects more favorably than carbon avoidance projects because they remove existing CO2 from the atmosphere, which is better aligned with global net-zero goals that call for sharp emissions reductions where possible and the use of carbon removals for hard-to-abate emissions. Further, the projects tend to have greater project-level additionality (see below) than carbon avoidance projects. Additionally, the Oxford Principles for Net-Zero Aligned Offsetting recommends a shift to carbon removal-based offsets and, eventually, to carbon removal-based offsets with long-lived storage. Causality Causality refers to the extent to which the project actually causes reduced GHGs in the atmosphere. Determination of causality comes from understanding the “counterfactual”, which is what the state of the world would have been like without the project. However, this can be difficult to determine. For instance, consider a project that protects a forested area from being deforested. Determining causality requires answering two questions. First, does avoiding deforestation lead to reduced GHGs? This is a purely scientific question, which can be answered by consulting the literature. It is well-established that cutting down a forest leads to more GHGs in the atmosphere, since the trees no longer absorb CO2 and they will emit stored CO2 if the trees are burned or allowed to rot in the process. This part of causality is relatively easy to establish in this example. Secondly, would the trees have been cut down in the absence of the project? If not, then the project is not avoiding emissions. This is more difficult, as it is not possible to know with certainty what would have happened without the project, or what certifiers refer as the “baseline” scenario. Offset projects must make the case that their project leads to fewer trees being cut down, and they generally use data concerning deforestation rates before the project or in similar areas. This type of analysis is difficult for an offset certifier to validate, especially since the project developer has an incentive to exaggerate the amount of causality. For example, widespread over-crediting was recently observed in California’s forest carbon offset program to the tune of an estimated 30 million tons of CO2e and $410 million. While the certification agencies attempt to assess causality, the standards of evidence are much lower than generally accepted in the social science impact evaluation literature. For instance, the parts of the model that are verified are generally proximate inputs (like say, usage of a stove) rather than final ones (such as total fuel burned in real life usage). Another consideration that has proven difficult to manage is leakage. Leakage occurs when efforts to reduce emissions in one place shifts emissions to another location. For example, an offset that protects an area of forest may simply lead to increased deforestation in another area. Leakage is difficult to monitor, and controlling for it is extremely complex. Causality is central to an offset project being valid, and a project must have high certainty of causality to be recommended by Giving Green. In cases (such as the forestry example) where changes in human behavior are needed to guarantee causality, Giving Green requires evidence from a rigorous impact evaluation to validate this behavior change. A rigorous impact evaluation provides a convincing measurement of the counterfactual, and calculates the change in GHGs compared to this counterfactual scenario. Project-level additionality Project-level additionality is satisfied if a project would not have happened without the sales of offsets. This requirement tends to be satisfied for projects run by non-profits who solely rely on offset revenue in order to operate. However, it can be very difficult to determine for projects with multiple revenue streams. For instance, consider a wind energy project that is considering selling carbon offsets. In many markets, wind energy is cost-competitive with other kinds of energy, and wind energy plants are built and profitable without the need for carbon offsets. In this case, a wind energy project does not satisfy project-level additionality. However, in other markets, a wind energy plant may not be profitable, and therefore would not have been built without an additional revenue stream from offsets. In this case, the offset project would have project-level additionality. Two characteristics of such offset projects make project-level additionality difficult to assess: It is very difficult to verify the actual financial circumstances of the project. In order to receive certification, project developers need to provide a financial model showing that with offset revenue they would be profitable, but without offset revenue, they would not be. However, the projections of future flows of costs and revenues necessary for such a model rely on a significant amount of guesswork. Additionally, project developers have every incentive to claim additionality and therefore be eligible to sell credits. The offset certifiers likely have no way to validate these models, and also must rely on their own guesswork to decide if they believe the project developers’ case. Verifying project-level additionality is further complicated by the timing of the carbon market. Offsets are only certified once a project is up and running. For something like a grid energy project, most of the costs are up-front and therefore have already happened by the time any offsets can be sold. That makes it difficult to consider the purchase of offsets as having caused any emissions reductions. One way to get around this is for projects to receive guarantees from buyers to purchase the offsets in the future (known as an Emissions Reduction Purchase Agreement, or ERPA). In these cases, it is appropriate to take a less literal view of project-level additionality. If projects were undertaken due to the expectation of being able to sell offsets, purchasing the offsets justifies this expectation and can help uphold the market in the future. Additionally, if the project developer is continuing to develop new projects, the offset purchase can provide working capital for these new projects. That being said, it is hard to justify the additionality of offsets from a capital-intensive project that are purchased far after the capital expenditure. In our assessments at Giving Green, we accept claims of project-level additionality only when projects rely on offsets for most or all of their revenue stream, or when offsets are crucial to raising private sector capital. The project also must not be required by regulations. We may recommend projects that do not satisfy project-level additionality if they satisfy marginal additionality, as described below. Marginal additionality Most project certifiers do not consider marginal additionality, but Giving Green believes it is important and overlooked. Marginal additionality means that each additional offset purchased contributes to reduced emissions. This is an important requirement for projects to work as advertised: the purchase of every single offset must cause extra GHG reduction. For example, let us consider a landfill gas capture project, where methane is captured and flared. Assuming there are no regulations requiring such a system and the gas is not sold, the project clearly satisfies project-level additionality, since offsets are needed to fund the entire project. However, a landfill will keep producing gas for many years, and after some time the cost of the project will be covered. In this case, additional offset sales simply add to the profits of the project developer, and certainly do not lead to reduced emissions. The opposite can also be true: projects can have marginal additionality without having project-level additionality. For instance, consider a for-profit provider of clean cookstoves. The company may have a viable business model, and would exist and sell cookstoves even if offsets were not available. Therefore, they do not exhibit project-level additionality. However, if they do sell offsets, this allows them to lower their prices, therefore selling more stoves. In this case, each additional offset can contribute to additional lowering of stove costs, resulting in more stoves being sold. Therefore, the project satisfies marginal additionality. Two significant factors determining whether a project have marginal additionality are its modularity and whether it is a non-profit. Projects that are modular , as opposed to those that primarily undertake one large capital expense, are more likely to use offset purchases for continued emissions reduction. For instance, service-based offset providers, like those who procure and destroy ozone-depleting substances, or manufacturers of small products, such as cookstove manufacturers, can easily reinvest offset proceeds into additional emissions reduction. For projects that do involve a large expense, offsets sold in early years are more likely to be additional, as this is when the project is paying down loans as opposed to contributing to profits. Non-profits are more likely to reinvest offset proceeds into additional activities. If a for-profit project developer is booking profits above the opportunity costs of its founders and investors, this is a reason to question marginal additionality: additional offset purchases simply increase profits and are unrelated to decreasing GHG emissions. An exception may exist where project developers can demonstrate the increased profits attract additional investment needed to deploy new GHG-mitigating projects. Giving Green addresses some of these challenges by considering vintage. Vintage refers to the year in which the carbon avoidance or carbon removal activity occurred. Projects that are selling carbon offsets for emissions that were avoided or removed more than two years ago do not meet our vintage standards. At Giving Green, we view marginal additionality to be critical to the validity of an offset, though we admit it can sometimes be difficult to ascertain. We need to have high confidence in the marginal additionality of an offset to be able to recommend it. Note that this is a higher bar than required by the offset certifiers, whose definition of additionality only includes project-level additionality. Finally, one needs to be sure that the emissions reductions are not claimed by multiple parties. For instance, both the producers and users of low-energy lightbulbs might apply for credits. Generally, we think the certification agencies do a good job of preventing this kind of behavior, and therefore Giving Green does not work to provide additional verification. Permanence An offset provides permanent emissions reduction if there is no chance of undoing the project’s activities. In projects that avoid emissions, this is frequently satisfied in a trivial manner. For instance, if a project incinerates a refrigerant, the GHG is destroyed and emissions are avoided permanently. But permanence can be more difficult to establish for forestry or other land use projects. For instance, consider an offset project that prevents a portion of forest from being logged. These gains can be completely undone if, in the future, the forest is logged or burns down. This is known as a “reversal”. Offset certifiers have tried to deal with this risk by requiring project developers to keep a certain percentage of offsets unsold in a so-called “buffer pool”. This acts as insurance, and is drawn down when there are demonstrated reversals. But it is difficult to be certain if reversals will actually be reported in the future, and if there will be enough offsets in the buffer pool. For instance, by some estimates the size of the buffer pool in the offset scheme in California’s cap and trade is insufficient due to increased fire risk. Giving Green views permanence as an important component of an offset’s validity, and therefore we need a high degree of certainty in permanence to recommend an offset. However, since land use projects are important and it is impossible to completely verify permanence for these, we may recommend projects with some permanence uncertainty as long as strong, proven methods are put in place to guard against reversals. Cost The public-facing cost of carbon offsets is typically based on market supply and demand determined by an intermediary or broker, and not on the cost of deploying the project itself. Giving Green utilizes project details, costing studies, and internal modeling to determine the real cost of the underlying project and address the lack of transparency in offset pricing. Projects with a lower cost per ton can reduce or remove GHGs more efficiently, but they may not reflect a high standard of quality based on factors like additionality and permanence. Giving Green uses tools like CarbonPlan’s permanence calculator to try to put projects with short-lived climate benefits on an even playing field with projects with more permanent benefits, though finding like-for-like cost comparisons between projects remains difficult. Co-benefits Some offset projects offer additional benefits besides GHG reductions, known as “co-benefits”. For instance, these could include improving the income of poor families, or improving biodiversity. Giving Green only uses GHG reductions to determine which offsets to recommend, and therefore it is not necessary for an offset to have co-benefits to gain our recommendation. However, as many offset purchasers would like to buy offsets with co-benefits, we highlight them in the analysis of our recommended offsets. Conclusion It is difficult to calculate the exact amount of emissions reduction caused by the purchase of a specific carbon credit, but it is still worth investing in good projects. Overall, our assessment is that it is extremely rare for a marketed offset to truly represent its advertised amount of emissions reduction. Calculating the amount of marginal emissions reduction from an offset sale is more of an art than a science. Even “good” offset projects tend to have some questions about their additionality or permanence. That said, on average, providing more funding for activities that are verifiably reducing GHGs in the atmosphere will almost certainly result in lower amounts of GHGs, even if it is hard to exactly quantify. Therefore, we still feel comfortable recommending “good” projects, even if we do not believe that the exact amount of emissions reduction advertised by the offset is achievable. We will keep looking for “perfect” offsets, but overall we think it is an unrealistic bar to achieve. This means that companies and individuals looking to go “carbon neutral” with certainty are likely to be disappointed. However, these entities can still finance valuable, albeit more expensive, climate-improving projects. Projects that demonstrate a high degree of additionality and permanence, for example, are the gold standard but may cost many times more than a standard carbon offset project. As such, Giving Green recommends that individuals and organizations view offsets simply as a philanthropic contribution to a pro-climate project with an evidence-based approach to reducing emissions, rather than a way to eliminate their contribution to climate change . And we think that individuals and organizations with flexibility in their donation options will get better value from donating to policy organizations rather than from purchasing offsets. Additional resources As our document is merely a brief overview, we recommend those interested in a more holistic view of the market explore these resources: “Securing Climate Benefit: A Guide to Using Carbon Offsets,” by the GHG Management Institute and the Stockholm Environmental Institute, offers an accessible description of how offsets work. The Oxford Principles for Net Zero Aligned Carbon Offsetting offers a useful taxonomy of the different categories of carbon offsets. McKinsey charts out a potential roadmap for scaling up carbon markets in “ A blueprint for scaling voluntary carbon markets to meet the climate challenge” . Forest Trends publishes an annual “State of the Voluntary Carbon Markets” report. The Berkeley Carbon Trading Project developed a database of voluntary offsets across all major offset project registries and Carbon Direct recently published some key findings in an in-depth analysis of the database. CarbonPlan has done some excellent research and analysis on carbon offsets, and carbon removals in particular.

Do biochar and bio-oil carbon offsets sequester CO2 emissions? Our independent analysis finds the best offsets and carbon removals to reduce climate change. Biochar & Bio-oil // BACK This report was last updated in January 2023. The prior version of this report was published in November 2022 . Summary Biochar is a charcoal-like substance that is created by heating up biomass (typically agricultural residues) at very high temperatures in a low-oxygen environment – a process known as pyrolysis. Converting biomass into biochar effectively halts much of the decomposition of biomass that would have led to the release of carbon dioxide (CO2) and other greenhouse gases. Biochar is typically applied to soils where it is claimed to enhance soil quality, though this is highly dependent on several conditions that still need to be fully understood through large scale field trials. Since biochar is often sold to farmers as soil amendments, it can be difficult to ascertain the additionality of buying biochar offsets. It is also difficult to quantify the permanence of biochar, as well as its soil benefits, as it can vary based on production and post-production conditions. We believe biochar has the potential to be a beneficial tool in addressing climate change, and have based our recommendations on the projects that we feel best address issues of additionality and permanence. We recommend one biochar project— Mash Makes —which can meet these criteria by giving away biochar we estimate as high-permanence for free. Bio-oil, a dense liquid that is also created through pyrolysis, can overcome biochar's additionality and permanence challenges if it is not sold for commercial purposes but is instead injected underground in geologic formations. We recomend one company— Charm Industrial —that produces bio-oil and injects it underground. What is biochar? Carbon removed from the atmosphere through the process of photosynthesis is released back into the atmosphere when biomass (organic material) biologically degrades. Biochar is a charcoal-like product that is created by heating biomass to very high temperatures in a low-oxygen environment—a process known as pyrolysis. Converting biomass to biochar slows the decaying process and locks stored carbon in place, in turn slowing down its release back into the atmosphere.[ 1 ] This charcoal-like substance can be added to soils, which prolongs carbon storage, enhances soil quality, and potentially increases crop yields in some conditions , enabling the soil to sequester more carbon overall.[ 2 ] A process known as “fast pyrolysis” can be used to convert biomass into bio-oil which can be used as an energy feedstock or pumped back underground for permanent storage. Biochar as a carbon removal While biochar is a relatively mature product, its use as a carbon removal is quite nascent. The IPCC revised its carbon removal guidelines to include biochar in 2019.[ 3 ] Shortly after, Puro.Earth released its biochar methodology for use in verifying biochar projects in the carbon removal market, followed by the release of the Verra biochar methodology in 2022. [ 4 ] Projects are primarily certified by either the European Biochar Certificate or the Puro Standard , with carbon credits available for purchase through traditional carbon registries, marketplaces such as Puro.Earth , and directly from projects themselves.[ 5 ] In fact, at time of writing this overview, major carbon offset registries had not yet begun listing biochar projects. The American Carbon Registry rejected an effort to approve a methodology for biochar projects after a peer review process found limited evidence of the stability of soil carbon sequestration in fields treated with biochar. Another registry, Verra, only recently proposed a methodology for establishing project baselines and project additionality for biochar projects with public review and final approval of this methodology expected by the end of 2021. Despite the lack of existing certification, marketplaces like Puro.Earth have made it possible to buy biochar carbon removal credits from providers outside of traditional carbon registries, and a few biochar and bio-oil producers make it possible to purchase carbon removal credits directly. Mechanism When biomass is converted to biochar, it dramatically slows the release of carbon into the atmosphere by preventing the biological decomposition of biomass - avoiding the release of greenhouse gases. For example, projects that collect biologically degrading agricultural wastes and convert them into biochar are generally seen as emissions avoidance projects. Some biochar advocates claim that removing crop waste from natural cycles of growth and decay (by converting it to biochar) is the equivalent of a carbon-negative technology. From our perspective, we admit that is somewhat of a grey area between avoided emissions and CO2 removal. As the production of biochar results in carbon being removed from the atmosphere overall, we lean towards considering biochar and bio-oil projects to be carbon removal, addressing ambiguity by labeling it a medium-permanence removal strategy. Projects that grow plants for the purposes of converting plant biomass to biochar have a more solid claim to be considered CO2 removal, as the project boundary includes the removal of carbon from the atmosphere through photosynthesis. Growing plants for this purpose, however, can have negative environmental and land use implications, and we therefore believe this approach should only be pursued if it does not harm food security, biodiversity, and rural livelihoods in the process. Proponents have also claimed that biochar applied to soils can increase crop yields, suggesting higher carbon dioxide uptake by plants through the process of photosynthesis, and therefore that biochar adds to carbon removal from the atmosphere. This effect has not been widely studied in field trials and varies significantly due to soil type, biochar composition, and other environmental conditions (see Causality section). We therefore ignore this in determining whether a biochar project is an avoidance or removal project unless strong evidence can be provided on the added soil carbon sequestration claims. Causality Produced from organic materials that have high carbon content, biochar is made up of anywhere between 35% to 95% carbon .[ 6 ] The product fixes carbon that would have otherwise been released into the atmosphere as carbon dioxide (every ton of carbon fixed in biochar results in 3.61 tons of avoided CO2 emissions as CO2 has a higher molecular weight than carbon).These organic materials, typically crop residues like wheat straw, corn stover, almond shells, rice husk, and others, would have been broken down by soil microorganisms, which release CO2 and other gases in the process and return nutrients from crop residues back into the soil .[ 7 ] A recent study found that leaving crop residues to decay on agriculture farms may actually store more carbon in the soils than would have been the case had the residues been cleared (though these benefits may be offset by increased emissions of nitrous oxide , a strong greenhouse gas).[ 8 ] Converting forestry and crop residues to biochar and applying them to soils leads to longer, more stable storage of carbon in soils than if residues were burned or simply applied to soils (approximately 50% of the original carbon is stored in biochar compared to 3% retained after burning and less than 20% after 5-10 years of biological decomposition).[ 9 ] The production of bio-oil through fast pyrolysis that is subsequently sequestered into injection wells also results in a more stable storage of carbon than would have otherwise decomposed. Biochar's and bio-oil's ability to fix carbon that would have otherwise more quickly decomposed is assessed as high, though the longevity of this benefit varies based on several factors, which are covered in the Permanence section. Project Additionality Biochar is a product that is commonly sold to farms where it is added to soils. Biochar projects that primarily depend on the sale of carbon credits, as opposed to the sale of physical biochar to farms, can make a reasonable claim to additionality. These projects tend to provide biochar to end users for free or at a substantial discount. Bio-oil that is sequestered underground and not sold to an end user would also satisfy additionality. Many of the projects we evaluated, however, depend primarily on the sale of biochar to farms as a soil amendment, making it hard to determine whether the biochar would have been produced without the sale of credits. For example, in 2012, it was found that an estimated 90% of biochar produced in Europe has been used as a feed additive in livestock farming for years, suggesting an already robust existing market for the product.[ 10 ] A 2018 producer survey estimated total biochar production at 36,700 to 76,600 tons per year in North America . A separate 2018 analysis estimated global biochar production at over 394 kilotons in 2021, which is expected to reach 781 kilotons by 2028 .[ 11 ] Determining the additionality of credits that support an already growing industry will require market analyses that can isolate growth in biochar production based on demand for credits. The ability to purchase biochar credits is relatively new, thereby limiting robust analysis of their additionality. A techno-economic analysis of biochar production cited wholesale biochar prices as being between $600/ton to $2,778/ton of biochar, with the most commonly cited sales price being $1,600/ton of biochar.[ 12 ] This would correspond to a carbon price of $237 to $1100/ton of CO 2 e, assuming a 70% carbon content. Biochar credits sold for substantially less than this carbon price are likely to be heavily dependent on end user sales, suggesting lower levels of project additionality. However, this is an admittedly crude approach to estimating additionality. With the exception of projects that do not generate profits from the sale of biochar or bio-oil project additionality for biochar is typically assessed as low. Marginal Additionality The production of biochar depends on a number of key inputs, including energy for the pyrolysis process, biomass feedstock, and pyrolysis units to conduct pyrolysis. The degree of marginal additionality depends on how constrained biomass producers are in obtaining these key inputs in response to revenue from credit sales. Biochar producers who are able to easily access new biomass feedstocks like agriculture waste residues, or are able to easily deploy new, modular pyrolysis units can make a strong case for marginal additionality. Alternatively, biochar producers that struggle to source new biomass feedstocks or depend on large, industrial scale pyrolysis units have a lower degree of marginal additionality. Overall, biochar projects tend to have high marginal additionality unless a project is unable to readily acquire new pyrolysis capacity or biomass feedstock because of credit sales. Permanence Converting biomass feedstock into biochar fixes carbon that would have otherwise been released into the atmosphere as the original biomass degrades. There are a number of factors that affect the stability, or durability, of the carbon in biochar: (i) biochar characteristics, (ii) production conditions, and (iii) post-production conditions. A combination of these factors determines the overall permanence of a biochar project; we expand upon each of these further in Appendix 1. (i) Biochar characteristics Molar ratios: the ratio of H:C( org) and O:C( org) in biochar determines its stability. For medium permanence biochar (with a half-life of 100-1000 years under laboratory conditions), the O:C( org) ratios should be between 0.2-0.6. For high permanence biochar (with a half-life greater than 1000 years under laboratory conditions), the ratio should be less than 0.2. Fixed carbon content: this is the proportion of stable carbon in biochar. The higher this number is, the more carbon can be stored per tonne of biochar.[ 13 ] (ii) Production conditions Pyrolysis temperature: Pyrolysis temperature is the temperature at which feedstock is converted to biochar. Pyrolysis temperatures of over 500°C to 600°C are most effective in producing stable biochar; however, this is also influenced by the type of feedstock.[ 14 ] Feedstock: Feedstock (the material being used to create biochar) also affects the permanence of biochar. Woody feedstocks tend to be the most stable, and grassy and manure feedstocks the least.[ 15 ] Crop waste and grassy feedstocks are intermediates between the two but can have wide variability in their stability depending on their ash content; low ash crop wastes such as sugar cane and nut shells are more suitable for carbon storage than rice husks and straws.[ 16 ] (iii) Post-production conditions The real-world applications of biochar can also strongly determine its stability in soils. The different geographic regions in which biochar is applied contain a diversity of soil types, moisture levels, mineral contents, and microorganism conditions, which can have varied impacts on biochar carbon decomposition.[ 17 ] More research and field trials are needed to achieve greater precision around biochar’s durability in soils. Carbon stored in bio-oil that is injected into injection wells is even less likely to decompose than biochar applied to soils. This is primarily because bio-oil sinks to the bottom of injection wells, whereas biochar is distributed near soil surface where it interacts with soil microbes and other elements. Injection wells are regulated by the US Environmental Protection Agency (EPA) and are used to inject hazardous or non-hazardous wastes and fluids in deep geologic formations. While carbon stored in bio-oil that is injected this way is less reversible than biochar in soils, this storage method is not without its risks. Lax oversight into over 680,000 underground waste and injection wells in the United States could lead to leaks and structural failures , however the EPA has deemed the probability of well failures to be low . In addition, bio-oil is denser than other brines, oils, and gases typically stored in these formations, and has been shown to form a solid approximately 48 hours after injection.[ 18 ] Alongside EPA monitoring bolstered by recent airborne leakage sensor technology, this gives us higher confidence in the permanence of bio-oil.[ 19 ] While the permanence of bio-oil is generally assessed to be in the medium range (100+ years), the permanence of biochar should be assessed on a case-by-case basis. Figure 1. Carbon storage methods by expected storage time, including biochar in soil in the 100-1000 yr range and bio-oil underground in the +100,000 yr range. Cost Puro Earth, a marketplace listing 23 biochar projects as of this writing, lists prices for biochar-based carbon removal credits ranging from $98 (100 EUR at the time of writing) to $524 (535 EUR) per ton of CO2. This is substantially more expensive than traditional avoidance-based carbon offset projects, but are cheaper than some of the technological carbon dioxide removal projects like direct air capture. One reason for the cost disparity between projects is that some biochar providers (like CarboCulture and HUSK Ventures ) make their biochar available to farmers at a significant discount and depend more heavily on the sale of credits, and are therefore pricing their credits higher. While we believe biochar projects that rely primarily on revenues from credit sales have a stronger case for additionality, they are often high cost. Projects that produce bio-oil from biomass that is sequestered underground (not sold) are priced even higher than biochar credits and are also considered high cost. For projects that sell to farmers and use carbon credits to lower the cost marginally, their “true” cost is difficult to ascertain, since one would need to understand the additional amount of biochar demanded due to the cost difference. We at Giving Green value when organizations are financially transparent so that additionality can be better assessed. Co-benefits When added to soil in some conditions, specific types of biochar can create long-term carbon pools in the soil, stimulate microbial benefits, increase soil’s water holding capacity, improve nutrient availability, decrease susceptibility to plant disease, and increase crop yields.[ 20 ] However, these benefits depend on a variety of environmental factors and biochar characteristics; we expand further upon these in Appendix II. Environmental factors The impact of applying biochar to soil on increasing crop yields depends on a number of environmental factors like soil type, soil pH, fertilizer inputs, and soil fertility.[ 21 ] Biochar could cause a positive increase in crop yields where it is able to improve the water holding capacity of the soil or add nutrients. Biochar characteristics Feedstocks that are less suited to carbon sequestration appear more beneficial for increasing agricultural outputs, due to their high mineral and unstable carbon content. Lower pyrolysis temperatures (between 401°C and 500°C) also had the greatest positive effects on crop yield.[ 22 ] While these are helpful guidelines, additional long-term field studies on the effects of biochar in soils under different contexts are needed to address our uncertainty regarding the co-benefits of biochar purposed for carbon sequestration. In the US, the recent Biochar Research Network Act of 2022 will establish a national biochar research network to quantify the characteristics that influence biochar co-benefits and carbon sequestration and understand the trade-offs between these uses. Conclusion We believe that biochar and bio-oil hold significant promise as valuable tools in addressing climate change, especially given their ability to store carbon for 100+ and 1000+ years, respectively. However, there can be a great deal of variance regarding the additionality, permanence, and co-benefits. In order to ensure that the climate potential of these pathways is maximized, we think a project-by-project assessment is necessary. At this time we recommend one biochar project, Mash Makes ; it is able to address uncertainty around additionality and permanence by providing its biochar—which we estimate as being high permanence—to farmers for free, and it is currently undertaking field trials to assess co-benefits. We also recommend one bio-oil provider, Charm Industrial ; it produces bio-oil and sequesters it underground, addressing some of the additionality and permanence issues with biochar providers. Glossary Aromatic compound : Flat, cyclical chemical compounds containing aromatic rings, which are a highly stable chemical structure. Inorganic carbon : Carbon-containing compounds that lack carbon-hydrogen bonds; these are more stable than organic carbon-containing compounds Feedstock : The biological material used to create biochar. Labile carbon : The residues of volatile or semi-volatile components of biochar:, the non-stable parts of organic carbon that can be easily degraded by microorganisms over weeks to months. This is not made up of aromatic compounds. Organic carbon : Carbon-containing compounds that have carbon-hydrogen bonds present; these are less stable than inorganic carbon-containing compounds. Pyrolysis : Thermal decomposition of materials at elevated temperatures. Appendix I - Biochar Characteristics (i) Biochar characteristics Molar ratios Hydrogen to organic carbon molar ratios (H:C( org) ) and oxygen to organic carbon molar ratios (O:C( org) ) are useful for identifying high-permanence biochars. The lower the ratio, the more stable the final product is and the longer it will take to degrade.[ 23 ] Where possible, search for H:C( org) ratios over O:C( org) ratios due to their greater accuracy.[ 24 ] Puro Earth ’s and the European Biochar Certificate (EBC)’s methodology requires H:C( org) ratios of less than 0.7 and O:C( org) molar ratios less than 0.4, which is the point at which the biochar is stable enough to use in carbon storage.[ 25 ] For medium permanence biochar (with a half-life of 100-1000 years under laboratory conditions), the O:C org ratios should be between 0.2-0.6. For high permanence biochar (with a half-life greater than 1000 years under laboratory conditions), the ratio should be less than 0.2.[ 26 ] Fixed carbon content Fixed carbon content is the proportion of stable carbon in biochar, which is also important to consider. This is a measure of how much carbon the biochar can store, showing the carbon sequestration potential per tonne of biochar.[ 27 ] Puro Earth requires a fixed carbon content of over 50%, but the higher this number is, the more carbon can be stored per tonne of biochar.[ 28 ] (ii) Production conditions Pyrolysis temperature Pyrolysis temperature is the temperature at which feedstock is converted to biochar. Higher temperature pyrolysis is strongly correlated to lower molar ratios, higher fixed carbon content, and greater biochar stability.[ 29 ] While Puro Earth standards allow for pyrolysis temperatures ranging from 350°C to 1000 °C, higher pyrolysis temperatures indicate better quality, more stable biochar. Pyrolysis temperatures of over 500°C to 600°C are most effective in producing stable biochar; however, this is also influenced by the type of feedstock.[ 30 ] Feedstock Feedstock (the material being used to create biochar) also affects the permanence of biochar. Different feedstocks have different permanence depending on their structural stability, ash content, and H:C( org) and O:C( org) ratios.[ 31 ] Feedstocks can be classified as woody (softwood, hardwood), crop waste (e.g. corn, wheat straw, and rice straw/husk), grassy, and manure (often poultry, pig, and cattle).[ 32 ] Woody feedstocks tend to be the most stable, and grassy and manure feedstocks the least.[ 33 ] Crop waste and grassy feedstocks are intermediates between the two but can have wide variability in their stability depending on their ash content; low ash crop wastes such as sugar cane and nut shells are more suitable for carbon storage than rice husks and straws.[ 34 ] Figure 2: SD, RH, FW, PL and PS indicate biochar of sawdust, rice husk, food waste, poultry litter and paper sludge and adjacent numeric values 1, 2, 3 and 4 indicate different pyrolysis temperatures of 350 °C, 450 °C, 550 °C, 650 °C respectively.[ 35 ] (iii) Post-production conditions The real-world applications of biochar can also strongly determine its stability in soils. The different geographic regions in which biochar is applied contain a diversity of soil types, moisture levels, mineral contents, and microorganism conditions.[ 36 ] The decomposition rates of stable carbon remain relatively unchanged by different post-production conditions, but the unstable portion is highly affected by these. Soil type influences how quickly unstable carbon in biochar degrades, with clay soils stabilizing soil carbon faster than mineral or sandy soils.[ 37 ] The mineral content of the soil also factors in, with soils high in iron and low in calcium promoting biochar stability.[ 38 ] Temperature is thought to have only minimal effects on biochar decomposition rates; even under climate warming scenarios, soil temperatures are not expected to become high enough to impact carbon stability in biochar.[ 39 ] However, abrupt soil moisture increases (from flooding or heavy rainfall) can rapidly increase the decomposition rate of unstable biochar; low moisture levels should be maintained where possible.[ 40 ] Soil microorganisms also play a significant role in biochar decomposition; conditions that enhance microbial activity can decrease the lifespan of biochar in soils.[ 41 ] High amounts of unstable carbon encourage microorganism activity, this can be remedied through high pyrolysis temperature and woodier feedstocks.[ 42 ] Biochars that have a high portion of unstable carbon from low pyrolysis temperatures and manure feedstocks can therefore temporarily enhance carbon loss. Ultimately, post-production conditions matter most for biochar with high unstable carbon content, and the net benefit on soil carbon storage is thought to be positive in the long term regardless.[ 43 ] Estimates of >1000-year half-life times for high-quality biochar remain accurate in temperate climates, but more research is needed on half-lives in a tropical context. However, any differences between laboratory and field estimates are likely to be greatest amongst lower quality biochars with high proportions of unstable biochar.[ 44 ] More research and field trials are needed to achieve greater precision around biochar’s durability in soils. Appendix II - Biochar Co-benefits Environmental Factors The impact of applying biochar to soil on increasing crop yields depends on a number of environmental factors like soil type, soil pH, fertilizer inputs, and soil fertility.[ 45 ] A meta-analysis on crop yields found that in tropical climates, where acidic, nutrient-poor, soils are more common, biochar elicited a 25% increase in yield , but had almost no effect in temperate climates.[ 46 ] Another meta-analysis found the effects of biochar on crop yields ranging from a reduction in crop yields by 28% to increases of 39% . Their results reinforce that positive effects on crop yields are most common in soils that are either acidic or neutral, or those that have a coarse to medium texture. This suggests that biochar increases crop yields where it is able to improve the water holding capacity of the soil or produce a liming effect (where calcium and magnesium are added to decrease soil acidity and add nutrients).[ 47 ] Positive effects may be further reinforced when biochar is applied alongside an inorganic fertilizer, which can increase yields by a further 10%.[ 48 ] Biochar characteristics There are two main characteristics of biochar that influence its suitability for agricultural use: feedstock and pyrolysis temperature, which determines organic carbon and mineral content, pH, and surface area.[ 49 ] Feedstocks that are less suited to carbon sequestration appear more beneficial for increasing agricultural outputs, due to their high mineral and unstable carbon content. In a 2022 meta-analysis, high-nutrient, manure-based biochars resulted in the greatest crop increases; lower-nutrient woody and crop-waste biochars still provided positive effects but performed significantly lower. Lower pyrolysis temperatures (between 401°C and 500°C) also had the greatest positive effects on crop yield, with no significant effect on yield observed when pyrolysis temperatures were greater than 600 °C.[ 50 ] This is because the mineral compounds that form at higher temperatures can be inaccessible for plant uptake.[ 51 ] While these are helpful guidelines, additional long-term field studies on the effects of biochar in soils under different contexts are needed to address our uncertainty regarding the co-benefits of biochar purposed for carbon sequestration. The recent Biochar Research Network Act of 2022 will establish a national biochar research network to quantify the characteristics that influence biochar co-benefits and carbon sequestration and understand the trade-offs between these uses. Endnotes 1. See “What is Biochar?” American University, n.d. 2. “Here we use a global-scale meta-analysis to show that biochar has, on average, no effect on crop yield in temperate latitudes, yet elicits a 25% average increase in yield in the tropics.” Jeffery et al., 2017 . 3. See Appendix 4. IPCC, 2019. 4. Puro Standard Biochar Methodology. Puro.earth, 2022. ; M0044 Methodology for Biochar Utilization in Soil and Non-Soil Applications, v1.0. Verra, 2022. 5. Puro Standard. Puro.Earth, n.d. , European Biochar Certificate. European Biochar Certificate 2022 6. See section 7.1, European Biochar Certificate 2022 7. “The decomposition of crop residues releases nutrients for plant use”. Rakkar et al., 2018. 8. “In fact, the researchers estimate that leaving crops residues to rot on the ground enables carbon to be locked into the soil for four times longer than if these residues were cleared away.” Bryce, 2021 ; “Assessments of the GHG balance of cropping systems have shown that the N2O emissions associated with crop residue decomposition can, in some situations, offset the positive effects that the recycling of crop residues has on maintaining or increasing soil C stocks”. Lashermes, 2022. 9. See abstract. Gaunt & Rondon, 2006. 10. “90% of the biochar produced in Europe is used in livestock farming.” Gerlach & Schmidt, 2012 . 11. See ‘Producers Survey Results’. Groot, 2018 ; “In terms of volume, the market was sized at 394.09 kilotons in 2021 and is expected to reach 781.09 kilotons by 2028.” Triton Market Research, 2022. 12. See Table 4. Biochar Prices Reported in Literature. Nematian, Keske & Ng'ombe, 2021 ; “Reported prices paid for biochar ranged widely depending on the packaging and volume 13. See section 1.1.1., Puro Earth 2021 14. See ‘Carbon, hydrogen, and oxygen’ section, Ippolito et al, 2020 15. See abstract and conclusions, Hassan et al. 2020 16. See section 3.1.2., Conz et al. 2017 ; section 3.1., Leng & Huang, 2018 ; ‘The amounts and rates of biochar decomposition’, Wang et al., 2015 17. See ‘Future perspective’, Spokas, 2010 ; ‘Abiotic factors and processes’, Wang et al. 2015. 18. “After injection, the bio-oil sinks within the formation. Even better, the bio-oil has tendency to polymerize into a solid, and at the temperatures and pressures in these formations, our surface-level 3rd party lab experiments have shown that bio-oil becomes a solid, locked in place, in just 48 hours”. Charm, n.d. 19. “Inexpensive and precise aerial rapid screening of methane leaks could be a proverbial game-changer for environmental monitoring.” Myers, 2022. 20. See section 2.6.1. CDR Primer, n.d. 21. See section 3.2.2. Adhikari et al., 2018. 22. See sections 4.1 and 4.3. Bai et al., 2022. 23. H:Corg and O:Corg molar ratios that use organic carbon content should be used instead of H:C and O:C molar ratios that measure total carbon content where possible, as they are a more reliable indicator of permanence. This is because inorganic carbon does not form part of the stable aromatic compound structure that constitutes biochar, and thus, will not be as permanent. This is of particular importance for high-ash biochars (such as poultry manure or paper mill waste) that contain a higher proportion of inorganic carbon. See section 3.1.1, 3.1.2., Leng et al. 2019 ; 24. H:C org is considered a better measure than O:C org as it can be measured directly, whereas O:C org has to be derived from other measurements (O = 100 − C − H − N − S − ash) and so is often overestimated, see introduction in Klasson 2017 and section 3.1.2., Leng et al. 2019 : 25. See 1.1.6., Puro.earth 2022 ; section 7.2 &7.3, European Biochar Certificate 2022 ; Appendix 7, International Biochar Initiative 2015 ; introduction, Klasson 2017 26. See conclusion, Spokas 2010. 27. See section 4.1.1., Leng et al. 2019 . 28. See section 1.1.1., Puro Earth 2021 29. See section 3.2., McBeath et al. 2015 ; section 3.3., Enders et al. 2012 . 30. See ‘Carbon, hydrogen, and oxygen’ section, Ippolito et al, 2020 31. See abstract, introduction, materials and methods Chaturvedi et al. 2020 ; ‘Biomass chemical characterization’, Veiga et al. 2017 ; section 3.1., Enders et al. 2012 ; 32. See ‘Feedstock choice’ section, Ippolito et al, 2020 33. See abstract and conclusions, Hassan et al. 2020 34. See section 3.1.2., Conz et al. 2017 ; section 3.1., Leng & Huang, 2018 ; ‘The amounts and rates of biochar decomposition’, Wang et al., 2015 35. Pariyar et al, 2020 36. See ‘Future perspective’, Spokas, 2010 ; ‘Abiotic factors and processes’, Wang et al. 2015. 37. See highlights, Fang et al. 2015 ; conclusions and implications, Fang et al. 2013 . 38. See conclusion, Yang et al. 2021 . 3 9. See “Temperature sensitivity of biochar decomposition” section. Lehmann et al. 2012 . 40. See conclusion, Yang et al. 2021 . 41. See ‘Biological decomposition’ Lehmann et al. 2012 ; ‘Microorganisms and biochar stability’, Ameloot et al. 2013 42. The portion of labile (unstable) carbon in biochar is determined largely by pyrolysis temperature and feedstock type. Higher pyrolysis temperatures and feedstocks with higher lignin content (hard woods) will lead to a lower portion of labile carbon. See ‘Influence of native SOM: priming and co-metabolism’, Ameloot et al. 2013 ; section 4.1, Zimmerman et al. 2010 . 43. Biochars that have a high portion of labile carbon can enhance carbon mineralisation in soil (the process of turning the carbon in organic matter into carbon dioxide) in early stages, facilitating carbon loss. See ‘Influence of biochar production and application conditions” Ameloot et al. 2013 ; introduction & conclusion Zimmerman et al. 2010 . 44. Kuzyakov et al., 2014. 45. See section 3.2.2. Adhikari et al., 2018. 46. “ Here we use a global-scale meta-analysis to show that biochar has, on average, no effect on crop yield in temperate latitudes, yet elicits a 25% average increase in yield in the tropics.” Jeffery et al., 2017 . 47. “The greatest (positive) effects with regard to soil analyses were seen in acidic (14%) and neutral pH soils (13%), and in soils with a coarse (10%) or medium texture (13%). This suggests that two of the main mechanisms for yield increase may be a liming effect and an improved water holding capacity of the soil, along with improved crop nutrient availability.” Jeffery el al., 2011. 48. “Biochar + inorganic fertilizer increased yield by an additional 10%.” Bai et al., 2022. 49. See ‘Biochar: Production and Characteristics’. Al-Wabel et al., 2017. 50. See sections 4.1 and 4.3. Bai et al., 2022. 51. “Specifically, with increasing pyrolysis temperature one typically observes increasing biochar C, P, K, Ca, ash content, pH, specific surface area (SSA), and decreasing N, H, and O content.” Ippolito et al., 2020.

Do fuel-efficient cookstoves avoid CO2 emissions? Read our independent analysis of whether these carbon offsets can reduce climate change. Fuel Efficient Cookstoves // BACK This report was last updated in November 2020. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Adoption of fuel-efficient cookstoves can decrease household fuel use and therefore carbon emissions. There are a wide variety of cookstove offsets on the market, using different technologies in different contexts. Although the methodology used to certify these projects ensures that they make a reasonable case for offsetting emissions, it also requires strong assumptions around stove use and changes in cooking behavior. The impact evaluation literature shows highly mixed results. Some randomized control trials (RCTs) show cookstoves having strong effects on fuel usage while others show null effects. We do not feel comfortable recommending cookstove offsets in general, as the RCT literature shows that the required assumptions are frequently not satisfied. We would recommend offset projects similar to those that have shown strong results in a rigorous evaluation, such as the recent work by Berkouwer and Dean. Given this RCT, we recommend offsets generated by the the manufacturer of the cookstoves studied in that paper, BURN. Cookstoves as a carbon offset In theory, clean cookstoves appear to be a good way for donors to achieve emissions reductions while also improving the lives of poor households. Many poor households in the developing world cook over an open fire, which is not energy efficient and results in household smoke. Myriad cookstove technologies promise improved fuel efficiency. This leads to fewer CO2 emissions, as well as improved indoor air quality and savings on fuel costs. Revenue from offsets can be used to subsidize cookstove distribution or even to give them away for free. However, clean cookstove projects have a mixed record of success. Many have used technologies that were not well-suited to local conditions, leading to stove malfunctions and limited usage. Whether a cookstove project is truly offsetting emissions depends on the details of the specific project. Mechanism Use of fuel-efficient cookstoves is considered emissions avoidance . The greater emissions from the use of a less efficient method, such as an open fire, are avoided, and the offset can be credited with the difference in emissions between the two methods. Causality Efficient cookstoves result in decreased emissions by decreasing the amount of fuel (generally wood) a household uses for cooking. This causal mechanism is theoretically valid, but in practice, even the introduction of stoves that are mechanically superior will not result in reductions in fuel usage, due to variations in human behavior. Certifiers such as the Gold Standard use a specific methodology to calculate emissions reductions from cookstove projects. We base our assessment off of the Gold Standard methodology, but to the best of our understanding, the methodology of the other certifiers is roughly similar. Their calculation relies on a standard model which takes into account the baseline value of fuel usage, the efficiency of the stove, and pre-determined conversion factors of wood to emissions to calculate emissions reductions. It also includes corrections for some human behavior elements, such as the fraction of households who continue to use the less efficient stoves and the fraction of cooking that continues to be conducted on the old stoves. Key model parameters, such as whether households are still using the more efficient stoves, need to be continually verified by a third party in order for carbon credits to be issued. Overall, we have three main concerns with cookstove certification methods: There is no actual measurement of fuel usage. While this is understandably difficult to measure, it would provide an indication of the magnitude of avoided CO2. Without this data, we have to rely on strong assumptions about usage of the stove and its efficiency in real-world conditions. Additionally, the offset certifiers assume that energy demand stays constant, even though the stove drastically decreases the price of cooking by reducing fuel needed. There is no comparison group. Offset certifiers estimate a reduction of fuel usage compared to the households’ fuel use prior to cookstove distribution. Thus, we must make the strong assumption that the level of wood consumption would have stayed constant in absence of the cookstoves. This may not be true if cooking practices are changing over time for other reasons, such as decreasing availability of foraged wood. Verification data is collected by recipients of offset funds. Verification surveys in the field are contracted by the project developers. They have a strong incentive to show that stoves are being used. Given that certification methodologies rely on a number of questionable assumptions, we next ask whether these are validated in the academic literature. Fortunately, a number of high-quality RCTs on improved cooking technology have been conducted in a number of contexts. RCTs are the gold standard in determining causality. If these studies generally find that stove usage remains high and wood usage decreases, they make a strong case for cookstoves meaningfully reducing emissions. Unfortunately, the results of these studies are mixed. Certainly, some show positive results. For instance, Bensch and Peters (2015) conduct an RCT of improved cookstoves in Senegal and indeed find large decreases in firewood usage. But they also find that 27% of meals are still cooked on traditional stoves in the treatment group a year after distribution, which is higher than the assumptions we see in many offset projects. Berkouwer and Dean (2019) find that improved cookstoves in Kenya lead to reductions in fuel expenditure by 40%, close to the manufacturer’s claims of 50% reduction, and that these effects persist for 18 months after the cookstoves’ adoption. On the other hand, Hanna et al (2016) find no change in greenhouse gas (GHG) emissions from a cookstove project in India, primarily due to dis-adoption of the stoves. Aung et al (2013) find no change in fuel usage for a cookstove project that received emissions credits in India. Beltramo and Levine (2013) also find no effect of an improved cookstove on fuel usage in Senegal. Due to the strong assumptions that must be made in the certification process and the mixed results in the RCT literature, we do not feel like we can confidently recommend cookstove offset projects unless causality has been validated with a high-quality impact evaluation. Project-level additionality There are many different types of cookstove projects, and the details of the implementing organization(s) are important in determining project-level additionality. Many cookstove projects sell their stoves, so offsets are not strictly necessary to ensure stove distribution. In these cases, the organization may have a valid business model without offsets, and therefore the offsets would not satisfy project-level additionality. In some markets, it might be necessary to sell the stoves at a subsidy, which would make offsets more additional. Also, some projects distribute stoves for free. These types of projects would not survive without offsets, and would have the strongest claim to project-level additionality. Marginal additionality In theory, a cookstove project should be able to satisfy marginal additionality. For projects that distribute stoves for free, an additional offset sold can provide funding to distribute an additional stove. For projects that sell stoves, offsets can be used to decrease prices, therefore increasing the total amount of cookstoves sold. As shown in Berkouwer and Dean (2019), the demand for cookstoves increases sharply as costs are lowered. Permanence If cookstoves avoid emissions from biomass burned as fuel, these gains could be short-lived if the biomass later burns down in a fire. However, in general, emissions avoided due to stoves being more fuel-efficient are avoided permanently. Co-benefits Improved cookstoves can deliver benefits to their owners apart from lowered GHGs. Households with an efficient cookstove save time and money that would otherwise be spent gathering and purchasing fuel. Improved cookstoves result in less indoor smoke, improving the health of family members, especially of women and children. Both economic and health benefits rely on the same mechanism as reduced GHG emissions: using less fuel. Therefore, if stoves are effective in reducing households’ use of fuels, they are likely to provide co-benefits. Assessment of cookstove projects Our main concern with cookstove offsets is that cookstove projects do not always result in lowered fuel usage by households. Therefore, the key input into our recommendations would be a clear indication that a particular offset project actually decreases household fuel usage in its real-world setting. We recommend BURN due to strong evidence of this real-world decrease in Berkouwer and Dean (2019). This study showed reductions in actual fuel use of a similar magnitude to reductions predicted by the efficiency of the stove, which is a key assumption made in the offset certification process that is rarely validated in the RCT literature. We would also feel confident recommending additional offset projects supported by a strong impact evaluation, or projects that are similar enough to BURN stoves such that we believe that the results in Berkouwer and Dean (2019) apply. References Aung, Ther W., et al. "Health and climate-relevant pollutant concentrations from a carbon-finance approved cookstove intervention in rural India." Environmental science & technology 50.13 (2016): 7228-7238. Berkouwer, Susanna and Joshua Dean. “Credit and attention in the adoption of profitable energy efficient technologies in Kenya.” Mimeo, 2019 Beltramo, Theresa, and David I. Levine. "The effect of solar ovens on fuel use, emissions and health: results from a randomised controlled trial." Journal of Development Effectiveness 5.2 (2013): 178-207. Bensch, Gunther, and Jörg Peters. "The intensive margin of technology adoption–Experimental evidence on improved cooking stoves in rural Senegal." Journal of health economics 42 (2015): 44-63. Hanna, Rema, Esther Duflo, and Michael Greenstone. "Up in smoke: the influence of household behavior on the long-run impact of improved cooking stoves." American Economic Journal: Economic Policy 8.1 (2016): 80-114. https://givinggreen.earth/carbon-offsets-research/burn https://givinggreen.earth/carbon-offsets-research/burn

Does purchasing credits from compliance markets avoid CO2 emissions? Our independent analysis finds the best carbon offsets. Purchasing from Compliance Carbon Markets // BACK This report was lightly updated in May 2023 to better align with our overall research methodology, but core findings and facts were not changed. The previous version of this report was published in October 2021. This report may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Cap-and-trade compliance markets have been around for thirty years and represent a market-based approach to limiting greenhouse gas (GHG) emissions from industries under their regulation (e.g. power generation, transportation). Recently, brokers have emerged that can buy and retire pollution allowances on these markets on behalf of customers looking to “offset” their GHG emissions. Giving Green evaluated these brokers, the markets they participate in, and the underlying industries regulated, and determined that we were not ready to recommend buying and retiring allowances from compliance markets at this time. It was difficult to determine the degree of credit the specific cap-and-trade programs deserve for emissions reductions given potential design weaknesses in these markets related to offsets and leakage. And while some brokers were taking more innovative approaches to engaging in these markets on behalf of customers, their model was too new to determine real world efficacy. Purchasing Offsets from Compliance Carbon Markets How it works Two main categories of carbon offset markets exist – voluntary and compliance markets. Voluntary markets allow for businesses and individuals with voluntary intentions to meet a carbon neutral or net zero claim to purchase carbon offsets from project developers. The compliance market is for offsets associated with regional or international pacts such as the Kyoto accords and national or regional cap-and-trade systems. In the United States, examples include the California Air Resources Board’s (CARB) cap-and-trade system and the Regional Greenhouse Gas Initiative (RGGI). In these kinds of market-based cap-and-trade systems, polluters must purchase an allowance for each ton of CO2 they emit annually. Offset projects assessed by Giving Green are necessarily part of the voluntary market. However, compliance market brokers have recently emerged to make it possible for those normally limited to buying offsets in voluntary carbon markets to participate in compliance markets. Individuals or businesses can pay a broker to purchase and retire allowances traded on compliance markets to “offset” their greenhouse gas (GHG) emissions. A climate benefit is created by reducing the number of allowances available for polluters to buy (and increasing the price of remaining allowances) and effectively reducing GHG emissions. This section will cover the benefits and risks of intervening in compliance markets in this way. While there may be some immediate climate benefits by restricting allowances to emit GHGs in a sector under a cap-and-trade system, there are features of compliance markets – particularly the fact that compliance markets are not truly capped – that can dilute the impact of these initiatives. Compliance market brokers The brokers that have emerged with the ability to participate in compliance markets mostly function the same way. Individuals or businesses can pay these brokers to purchase and retire allowances from compliance markets equal to the volume of GHG emissions they wish to offset. We briefly reviewed the work of four such brokers as examples of those operating in this space: The Adirondack Council retires allowances equal to 1 ton of GHG emissions from the RGGI market for every $25 carbon reduction certificate they sell on their website. Carbon Lighthouse, an NGO, offers a similar service and has retired 90,000 tons of GHGs through the RGGI and California cap-and-trade program. Air to Earth purchases and retires allowances from the RGGI market and then applies a portion of the sales revenue to finance an inhouse direct air capture (DAC) project and to support advocacy organizations working on carbon removal. C limate Vault purchases allowances on RGGI and California’s cap-and-trade market, then “vaults” these allowances, or temporarily retires them, with the intention of eventually selling the allowances back into the relevant compliance market. Climate Vault uses the proceeds from selling allowances back into the market at a later date to buy carbon removal credits from companies that have been vetted by their expert team. Mechanism Purchasing and retiring emissions allowances on compliance markets reduces GHG emissions entering the atmosphere, rather than removing existing GHGs, and therefore is considered emissions avoidance. Some brokers, like Climate Vault and Air to Earth, incorporate additional mechanisms of supporting carbon dioxide removal. Air to Earth claims to use the proceeds to support carbon removal advocacy efforts and fund an in-house direct air capture initiative. Climate Vault intends on selling purchased allowances back into compliance markets and using the proceeds to purchase carbon removal credits from vetted companies. Air to Earth’s progress on advancing carbon removal using their proceeds is difficult to verify. Climate Vault has not yet had an opportunity to use proceeds from the sale of allowances to buy carbon removal credits on a one-to-one basis (the organization is planning to undertake this in 2022). These approaches are too new and unvetted for us to assess their efficacy, and we therefore cannot yet consider them to be carbon removal mechanisms. Causality Causality is difficult to determine, as the actual GHG reductions caused by these brokers depends on the actions of the bodies that govern these carbon markets and of the individual polluters regulated under them. Compliance markets are not truly capped. Carbon markets can theoretically release more allowances into the market if prices get too high, or they can withhold or eliminate allowances they consider to be surplus after a period of time . These actions can significantly disrupt the impact claims made by compliance market brokers. For example, if a broker purchases and retires a large quantity of allowances on behalf of their clients, restricting available allowances and increasing prices, markets may simply release more allowances. Some compliance markets, as in Europe’s case , have begun to withhold or eliminate allowances they consider to be surplus. The active participation of brokers buying and retiring credits may result in markets withholding or eliminating surplus allowances more slowly, meaning the cap on emissions from polluters is higher than it would have been without brokers’ purchases. Both of these responses to broker purchases and retirements by compliance markets could significantly dilute the impact claimed by brokers. However, North American markets, like California’s cap-and-trade program and the RGGI, are more insulated from these changes because decisions around the allowance cap are made years in advance, and price triggers that would result in releasing more allowances are higher than current prices. RGGI’s price trigger to release more allowances is $13 per allowance (increasing by 7% per year ) which is approximately 40% higher than RGGI’s current price at $9.30 . It is worth noting that prices have increased substantially over the past several auctions, making it possible for the price trigger to be reached. California’s cap-and-trade program’s cap is set to decline by an average of 4% per year until 2030 and by approximately 3% of the 2020 cap per year under RGGI . For this reason, the brokers we reviewed engaged exclusively in North American compliance markets. The track record of the compliance markets themselves is difficult to ascertain. In California, where the cap-and-trade program covers 85% of the state’s emissions, statewide GHG emissions declined 5.3% between 2013, when the program was formed, and 2017. Under RGGI, power plant emissions reductions in participating states are down 47% , exceeding reductions of power plants in the rest of the United States by 90%. However, it is difficult to establish causality between emissions reductions and specific programs and policies. In the same time these cap-and-trade programs have existed, energy efficiency technologies have improved, renewable energy costs have come down, and other climate policies have come into effect. Critics point out that California’s program has made too many concessions to the oil and gas industry, does not hold individual polluters responsible, and potentially weakens other climate regulations. Polluters have the ability to use carbon offsets towards meeting a small portion of their compliance obligation, which risks diluting the impact of cap-and-trade programs given the challenges seen with forestry offsets in particular. Polluters may also choose to move their polluting activities to non-regulated states to bring their internal costs down, meaning that despite regional decreases in emissions, overall emissions remain the same. For example, under RGGI, electricity imported from outside the participating states has significantly increased in the last 10 years . This is a form of leakage, where carbon pollution just shifts from one jurisdiction to another. Research is being done to understand the impact of overlapping climate policies and other unintended consequences of cap-and-trade systems. Establishing a causal link between cap-and-trade programs and actual emissions reductions – especially in an environment of overlapping climate policies, industry loopholes, and lower costs for green technology – can be difficult. As a result, we rate purchasing from compliance carbon markets as low on our causality metric. Project-level additionality Because there is not a specific project being supported through these brokers, this metric does not apply. Marginal additionality Setting aside broader causality concerns, these purchases do have a high degree of marginal additionality – depending on whether there are surplus allowances in the market. For every ton an individual or business purchases from a broker, one ton is purchased and retired from a compliance market like RGGI. Marginal additionality is made even harder to ascertain when it comes to claims made about additional climate benefits beyond allowance retirement: for example, Air to Earth’s claim to support an in-house direct air capture project or Climate Vault’s claim to support carbon removal enterprises with the proceeds from the sale of carbon allowances back into compliance markets. These efforts are too new and untested for us to assess the marginal additionality of these approaches. Overall, we assess the marginal additionality of these brokers as medium given the persistence of surplus allowances in these markets and the potential for brokers to sell allowances from prior year auctions. Permanence Brokers that purchase and can prove that they have permanently retired allowances (Adirondack Council, Air to Earth, and Carbon Lighthouse) rate highly from a permanence standpoint. This claim is difficult to make for Climate Vault, however, since the company plans to sell allowances back into the market, and thus far has not funded any carbon removal projects that we can assess for permanence. Further, given the high cost and limited supply of permanent carbon removal, it is yet to be determined whether Climate Vault can secure permanent carbon removal credits on a one-to-one basis using proceeds from the sale of allowances. Cost The cost to purchase and retire compliance market allowances varies by broker. Adirondack Council offers to permanently retire one ton of emissions allowances from RGGI at a cost of $25/ton. Air to Earth offers multiple subscription packages. Their “Starter Plan” claims to allow buyers to “remove” 4 tons of CO2 every year for $5/month or $60/year - approximately $15/ton of CO2. Air to Earth’s use of the term “remove” in this context refers to the retirement of allowances from a compliance market. Carbon Lighthouse will retire 1 ton of CO2 from RGGI for $12/ton. Climate Vault allows individuals to offset 1 ton of CO2 for $14.78/ton With costs ranging from $12 to $25/ton, these offsets are comparable with many renewable energy and forestry offsets. The underlying cost of the allowances vary depending on the compliance market used and the vintage of the credit. All of the providers studied purchase and retire allowances from the RGGI market. In its latest auction as of this writing (September 2021), the price of RGGI’s allowances was $9.30/ton , and it was as low as $2.53/ton as recently as June 2017. The price of California’s cap-and-trade program’s allowances in its latest auction (August 2021) was $23.69/ton, up from $10/ton from its first auction (November 2012). In order to keep their actual costs lower than their selling price, brokers can exclusively participate in the RGGI compliance market with a lower allowance cost, diversify across multiple compliance markets, or retire allowances that were purchased from previous auctions at lower prices. What brokers are doing with the premium they are charging can range from supporting local environmental projects to advocacy efforts and in-house projects to fundraising and administrative costs. There is little transparency, however, on the breakdown of how remaining funds are used after allowances are purchased. Finally, many of the brokers operating in this space are 501(c)3 entities, meaning proceeds will not be going towards their profits while making purchases potentially tax-deductible. Co-benefits The additional benefits of buying from these brokers can be assessed on a broker level and a market level. At a broker level, Adirondack Council, Air to Earth, and Carbon Lighthouse claim to use part of the funds to support climate advocacy efforts or in-house environmental projects. Given the lack of publicly available details on these efforts, we believe the greater co-benefits exist with the revenue received from the cap-and-trade markets themselves. Cap-and-trade markets like RGGI and the California cap-and-trade program were designed to use the proceeds from allowance sales to address jurisdictional climate goals and benefit small businesses and communities. Proceeds from allowance sales go towards financing clean energy projects, direct assistance to bring down the cost of energy for low-income communities, improving air quality, and other environmental priorities for participating states. RGGI estimates its 2019 auctions lowered electricity bills for 260,000 households and 1,400 small businesses and supported projects that will avoid the release of approximately 2.5 million tons of CO2. However, the cap-and-trade programs have come under fire for allowing polluters to meet part of their compliance obligation by buying offsets, and in some cases maintaining or even increasing polluting activities in proximity to low-income communities and communities of color. Given the benefits from investments made with proceeds from allowance sales, the opacity of broker activities with these funds, and the challenge offsetting presents, we assess co-benefits as medium. Giving Green’s Assessment While we are intrigued by the model that brokers have used to intervene in compliance carbon markets, we are not ready to pursue recommendations of any of these brokers at this time. This is primarily because it is not clear that the specific cap-and-trade programs involved have been designed in a way to avoid our causality concerns, and the groups that are taking more innovative approaches in this space are too new to have proven their model.

Giving Green recommended Tradewater as one of the most effective carbon offset providers in 2022. Tradewater // BACK This recommendation was last substantially updated in January 2022 and lightly updated in January 2023 to reflect pricing changes. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We do not have plans to update this recommendation in the foreseeable future as we have paused our work assessing direct carbon removal and offset projects. Questions and comments are welcome. Giving Green believes that donating to our top recommendations is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these recommendations do) may not be tenable for all donors, especially businesses. Taking this into consideration, we recommend Mash Makes specifically for businesses given its more direct alignment with corporate net-zero ambitions. We believe Tradewater to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top recommendations. Overview of Tradewater Mechanism Causality Project-Level Additionality Marginal Additionality Permanence Co-Benefits Cost-Effectiveness Conclusions Overview of Tradewater Tradewater is an organization that works internationally to find and destroy refrigerants and other gases with especially high warming potential; the refrigerants and gases targeted by Tradewater are categorized as ozone-depleting substances (ODS). Tradewater’s revenue comes completely from the carbon offset market, and it sells offsets to consumers through its website. Tradewater also sells larger batches of offsets directly and works with offset brokers as needed. Tradewater engages with a variety of organizations on refrigerant destruction. [1] For example, this year Brown University purchased 137,500 offset credits from Tradewater. [2] This National Geographic piece gives more information about Tradewater’s history and projects. Tradewater has offset projects in Latin America, the Middle East, and Southeast Asia, certified through either the American Carbon Registry (ACR) or Verra. Our analysis of Tradewater uses details from a Verra-certified project in the Dominican Republic, which we believe is generally representative of its projects. In this project, Tradewater gathers ODS from existing stockpiles and transports them to the USA (“or potentially elsewhere in subsequent monitoring events for destruction at a facility that meets the Montreal Protocol’s TEAP requirements” ) for incineration. [3] The project’s offset registry documentation is available here . Mechanism ODS destruction projects, including those conducted by Tradewater, are considered emissions avoidance as they reduce the intensity of emissions that would have otherwise leaked into the atmosphere. Causality As detailed in our research on refrigerant destruction offsets , we assess the causality of the offsets by verifying the following: Converting the ODS into less harmful substances; Establishing the counterfactual of ODS release into the atmosphere; Ensuring that destruction of ODS does not lead to more production of harmful gases; Accounting for the carbon footprint of the removal activities. Conversion of ODS into less harmful substances Tradewater removes GHGs by incinerating ODS, converting them into substances with lower warming potential. Establishing the counterfactual of ODS release into the atmosphere Would ODS gases have escaped in the absence of Tradewater’s project, or would they instead have been sequestered indefinitely in canisters and appliances? The Verra protocol allows projects to claim 100% of destruction when ODS are recovered from appliances at their end-of-life—meaning that Verra assumes 100% of ODS would have leaked if not destroyed—and 25% per year when they are recovered from canisters that could be sold into the market or sit unused in a warehouse. These rates are based on the Article 5 ODS Project Protocol , published by the Climate Action Reserve, a North American offset registry. Overall, the actual leak rate is a major source of uncertainty, as potentially gases in stockpiles could remain sequestered for a long time. However, we think that the overall concept that the gases would eventually leak into the atmosphere is valid. In the Dominican Republic, the majority of ODS that Tradewater destroys are from stockpiles, meaning that the 10-year cumulative emissions would total approximately 94% of the stock-piled ODS under an assumed 25% yearly leak rate. There are no regulations in the Dominican Republic mandating that ODS be destroyed. [4] Therefore it is assumed that the gases would not be destroyed without Tradewater’s involvement. Tradewater considers what would have occurred in the counterfactual scenario when quantifying the CO 2 e impact of their destruction events. Ensuring that destruction of ODS does not lead to more production of harmful gases Destruction of ODS may increase demand for the production of similar gases with high warming potential. According to Tradewater, this is not an issue with its projects because the captured cases of ODS have no further economic use. The appliances that use this type of gas are no longer in service, which is why the ODS is in stockpiles as opposed to being sold in the market. Accounting for the carbon footprint of the removal activities As part of its offset certification process, Tradewater accounts for the carbon footprint of obtaining and transporting the ODS. Tradewater uses a default factor of 7.5 tons of CO 2 e as determined by the Climate Action Reserve; [5] we have used this factor as well in our project analysis in cell D36. Overall, we feel confident that Tradewater’s activities are reducing the intensity of GHGs in the atmosphere. Project-Level Additionality According to Tradewater, it relies on the offset market for 100% of its revenue. Tradewater would not exist without the offset market, so this element of additionality is achieved. Marginal Additionality Tradewater is undertaking multiple ODS destruction projects, and could invest all offset revenue into new projects. Therefore, it is certainly plausible that each offset purchased can directly lead to additional GHGs eliminated. We believe that there is a high case for marginal additionality given that Tradewater has grown from a project of 50,000 tons to undertaking projects avoiding 3 million tons annually. It has also expanded to 11 countries and increased from 6 staff members to 40. [6] However, there is some uncertainty about this assumption given that Tradewater is a privately held for-profit company. If Tradewater, via sale of offsets, is making profits above a reasonable reimbursement for the risk taken by its founders and investors, then it is possible that offset dollars are going towards profit-taking as opposed to carbon removal. In this case, not every offset purchased is truly additional, as Tradewater would likely destroy the same amount of ODS even if fewer offsets were sold. Tradewater’s financials are not public, so it is impossible to know exactly how much of its offset income goes into project operations versus profits. Additionally, it does not disclose the amount needed to purchase the ODS, making it difficult to conduct an independent assessment of the financial flows of offsets. In conversations with Tradewater about this issue, it claimed that its mission is to remove as many refrigerants as possible and, therefore, that it reinvests any profit from a given project into the next project. It also claimed that its owners do not take profit disbursements above their salaries. These are difficult statements to verify, and we encourage Tradewater to make its financials public. Tradewater claims that being a for-profit company allows it to access bank loans, which are needed to finance further removal efforts. We find this argument reasonably compelling. Since we first recommended them two years ago, Tradewater has become a registered B-corp . Permanence When ODS is destroyed by Tradewater, emissions are permanently reduced. Co-Benefits In addition to reducing warming, preventing ODS from being released into the atmosphere also prevents ozone destruction. Cost-Effectiveness As mentioned above, Tradewater receives 100% of its revenue from offsets. We therefore think it is reasonable to assume $18 per ton, the current cost at which Tradewater sells offsets, as a top-line estimate of cost-effectiveness, though actual costs may be lower. Since Tradewater is a for-profit LLC, we unfortunately do not have access to its financial records to assess costs in more detail. To better understand Tradewater’s effectiveness, we assessed data from two Verra-certified projects in Ghana from 2018 and 2019 . Since these data do not include project costs, we cannot use them to sense-check overall cost-effectiveness. Instead, we examined the plausibility of Tradewater’s estimates of (a) counterfactual baseline emissions from destroyed GHG and (b) project emissions. We lightly reviewed these data and found the methodology and inputs to be plausible. [7] This gives us some additional confidence that Tradewater is not substantially overestimating net emissions avoided for its projects, which could in turn cause it to underestimate its cost per tCO2e avoided. The total amount of CO 2 averted is calculated by taking the amount of ODS actually destroyed, and converting this to a CO 2 -equivalent based on the global warming potential (GWP) of ODS. The calculation also includes estimates of how quickly the gas would leak into the atmosphere if it were not destroyed (the “leak rate”) as well as emissions created in the process of transporting and destroying the gas. Although there is some uncertainty in the model parameters, notably the GWP and leak rate, the calculations for Tradewater’s offsets use assumptions, approved by certification bodies like Verra, that we believe are reasonable. The actual cost of destruction is murky, and we have not been provided with exact financials for Tradewater’s projects. However, given the claim by Tradewater that offsets are its only source of revenue, we think that its stated cost of $18 per offset is a realistic cost estimate. Conclusion Overall, we believe the offsets offered by Tradewater are highly credible and that purchasing Tradewater offsets has a direct link to decreasing the amount of GHGs in the atmosphere. Our main concern is that Tradewater is a for-profit company, and therefore could claim offset revenue as profit instead of reinvesting it in further ODS removal projects. We urge Tradewater to make its financials public in order to reassure offset buyers. Note: Tradewater is expanding its projects to include plugging abandoned and orphaned oil and gas wells in the United States that are leaking methane. It plans to begin selling credits for these projects at the beginning of 2023. While we have not currently conducted research on methane capture, we may expand our work to consider this sector in the future. We thank Tim Brown, CEO of Tradewater; Sean Kinghorn, Senior Director of Market Development for Tradewater; and Kirsten Love, Director of Market Development for Tradewater, for a series of conversations that informed this document. Endnotes [1] The Catalytic Coalition. https://tradewater.us/catalytic-coalition/ [2] "As part of its Sustainability Strategic Plan, Brown will eliminate 137,500 tons of greenhouse gases through the purchase of high-quality carbon offset credits from Tradewater.” https://www.prweb.com/releases/2022/6/prweb18730717.htm [3] https://registry.verra.org/app/projectDetail/VCS/2449 [4] "In summary, current regulations in the Dominican Republic do not mandate the destruction of ODS material in the country, as other options for the management of ODS are suggested and allowed besides just final disposal." https://registry.verra.org/app/projectDetail/VCS/2449 [5] “The emission factor shall be equal to 7.5 pounds CO2e per pound of ODS refrigerant destroyed. This emission factor aggregates both transportation and destruction emissions.” https://www.climateactionreserve.org/wp-content/uploads/2012/01/Article_5_ODS_Protocol_V2.0_Draft_for_Public_Comment.pdf [6] Email communication with Tradewater. 2022-11-11 [7] We did not conduct an in-depth review of these data. Instead, we more closely examined important parameters such as the leak rate (how quickly the gas would have leaked into the atmosphere if it weren’t destroyed), project crediting period, and line items for project emissions.