The Dos and Don’ts of Carbon Credits

Cool Effect
Cool Effect
Published in
5 min readApr 26, 2023

When Cool Effect was founded in 2015, we knew there was a growing coalition of alarmed and concerned individuals, organizations, and businesses united in their desire to take action against climate change. Even now, eight years later, concern over climate and interest in the voluntary carbon market has never been greater.

Companies are stepping up at unprecedented rates and looking for ways to take measurable action to reduce carbon emissions — we know, because they’re talking to us about them. Organizations often approach us looking for direction and insight on where to begin in addressing the environmental impact of their business and how offsets fit into their sustainability plans. Last year alone, the number of businesses reaching out to us doubled.

Cool Effect has compiled years of knowledge and experience ensuring that businesses have the information, tools and resources needed to get started, including our focus on identifying high-quality carbon projects — or what we like to call Carbon Done Correctly.

So if you’re just getting started in the world of carbon offsets or if you’re looking for more of a quick intro than a deep-dive into our methodology, we’ve got some simple Dos and Don’ts that’ll help you get started.

DO: Invest in high-quality projects that prioritize science, transparency, and community impact.

Every international carbon standard requires a project to provide and prove measurements based on peer-approved scientific methodologies. At the bare minimum, you should ensure that the offsets from the carbon emission reducing project you select have been certified by one of the major international carbon credit standards. Some platforms, like Cool Effect, prioritize reviewing projects certified by multiple standards, including third party auditors.

Regardless, relying on science and proven methodologies will guarantee you’re investing in projects that are scientifically and financially strong while remaining ethically sound. It also guarantees that your project will be 100% additional — which means that the reduction in carbon emissions (as well as the project’s resulting benefits to local communities) would not have happened under any other circumstances.

DON’T: Use carbon offsets in place of actual reductions in day to day emissions or as an excuse to pollute — they aren’t a magic solution, they’re simply a tool to mitigate carbon emissions.

We have a saying at Cool Effect: “Do your best, then offset the rest.” And we don’t just say that because it rhymes. A key part of our Carbon Done Correctly approach means treating carbon offsets for what they are — an effective tool, but not the only tool, in the fight against rising carbon emissions. Real, quality carbon offsets are not free passes to pollute. Quality carbon projects not only verifiably reduce emissions that would not have been reduced otherwise, they also simultaneously protect the planet and improve the lives of the communities where they’re based. Carbon projects that attempt to greenwash corporate inactivity or excuse to keep the status quo in place aren’t part of the solution, they’re part of the problem.

The carbon offsets generated by high-quality carbon projects like this mangrove reforestation project above aren’t some kind of magic solution — real science, real work, and real people are required to make a real impact.

DO: Select offsets that benefit the local communities where they’re based — routing private capital to developing countries is key to supporting their sustainable economic development.

While reducing emissions is the primary goal of any offset, that only tells half the story — while carbon projects should have a tangible impact on the reduction of carbon in our atmosphere, they should also have a tangible positive impact on the communities where they’re based — most often in developing companies. Put simply, high-quality carbon offsets should benefit the planet and its people. Making an impact means not only reducing carbon emissions, it means supporting those local communities where the projects are based, providing income and opportunities for those who need it most.

The revenue generated by high-quality carbon offsets can provide local communities with all kinds of additional benefits, such as classroom improvements and increased resources at local schools.

DON’T: Let your love of a deal or your reverence for a premium price be the sole decision driver when it comes to carbon offsets.

Many things can impact the price of a carbon offset, from location to logistical needs to project overhead. In our experience, most prices for well managed and regularly verified projects tend to hover somewhere between $3 and $14 per tonne.

If a project sells for less than a few dollars per tonne, it becomes difficult to see how the sale of carbon offsets can have a real impact on the project operations, which means one thing: buyer beware. Unless the reason for the low price is explicitly stated by the provider, we recommend skepticism for very cheap offset prices.

DO: Do your research, and look for verification from one of the major carbon crediting standards, such as Verra, The Gold Standard, the Climate Action Reserve of the American Carbon Registry. The voluntary carbon market is a crowded place, so picking a standard (or a few) you can trust is key.

Integrity is just as key as transparency when it comes to evaluating carbon offsets. With the Voluntary Carbon Market being an unregulated one, some major lines of criticism against carbon offsets and the carbon market ranges from a lack of transparency to a lack of quality assurance. In reaction to the criticism, various standard groups like those listed above have gained prominence. Keep in mind that while these standards are all extremely important, they have varying levels of criteria, so make sure you’re aware of the particular evaluation methods of each — or better yet, try to find offsets that have been evaluated and verified by multiple standards.

DON’T: Rely on offset providers that prioritize profit or simplified rules and requirements over the planet.

Unfortunately, prices in the carbon market can also vary because of added fees, with providers doing everything from marking the price up to the nearest dollar or even buying credits for a low price and reselling them at a higher price. Only purchase offsets from providers that have full transparency in their pricing structure — if an offset price sounds too good to be true, it probably is.

--

--

Cool Effect
Cool Effect

We’ve reduced over 8 million tonnes of carbon emissions. And we’re just getting started.