# Carbon Credit Methodologies

**Introduction:**

While corporations continue to push the boundaries of sustainable action, an equal push occurs from technology providers, environmentalists, and voluntary registries to develop carbon solutions to aid in this mission. The creation of numerous carbon projects elucidates the need for more robust and transparent methodologies for measuring and verifying the effectiveness of these solutions.

**Defining Methodology:**

A carbon credit methodology is a framework for creating a carbon credit and then quantifying/verifying the greenhouse gas (GHG) emissions reductions or removals from that specific project.

Methodologies are developed by a variety of organizations, including governments, NGO’s, and private companies. They are typically reviewed and approved by a third-party organization before a carbon project developer can follow it to create carbon credits.

For example, a reforestation project will follow a specific set of rules when calculating the level of CO2e absorbed by the outlined forest and, therefore, the number of carbon credits produced by the project over time. Similarly, a renewable energy project will follow a different but equally specific set of rules to quantify and verify the environmental impact and CO2e reduction.

Here are some key elements of a carbon credit methodology:

* **Project eligibility:** The methodology should specify the types of projects that are eligible to generate carbon credits.
* **Emissions reductions or avoidances:** The methodology should specify the types of emissions reductions or avoidances that are eligible for carbon credits.
* **Measurement and verification:** The methodology should specify the methods used to measure and verify emissions reductions or avoidances.
* **Baseline:** The methodology should specify the baseline emissions level against which emissions reductions or avoidances are measured.
* **Monitoring and reporting:** The methodology should specify the monitoring and reporting requirements for projects that generate carbon credits.

**Measurement, Reporting, & Verification (MRV):**

The MRV process is quintessential to any effective effort to reduce and remove GHG emissions. This acronym refers to a multi-step process to *measure* the amount of GHG emissions reduced or removed by a specific carbon credit project over a period of time. That carbon project then *reports* these findings to an accredited third party, like a voluntary carbon registry. The third party then *verifies* the report so those results can be certified and carbon credits can be issued to the project.

Current MRV solutions can be costly, time-consuming, and unfortunately, inaccurate, as they often rely on manual operations. Innovations like Digital MRV (DMRV) solutions provide breakthroughs that augment carbon markets by enabling accuracy. Digital technologies streamline data collection, processing, and quality control in the MRV process, inevitably reducing the cost and time of issuing high-quality carbon credits. Geo-spatial satellite imagery highlights a popular example of a DMRV solution. Satellites capture geo-thermal images to outline the tangible carbon sequestration in a project’s baseline.

MRV is the key to unlocking climate finance and highlighting progress on climate goals. The process proves that a carbon project has actually \*\*\*\*reduced or removed harmful emissions so that those actions can be converted into credits with monetary value. With MRV, project developers ensure that one carbon credit equals one ton of GHG emissions removed from the atmosphere.

**Methodology Examples**

* [Improved Forest Management: Conversion from Logged to Protected Forest](https://verra.org/methodologies/vm0010-methodology-for-improved-forest-management-conversion-from-logged-to-protected-forest-v1-3/)
* [Electricity Generation from Biomass in Power-Only Plants](https://cdm.unfccc.int/methodologies/DB/4HISH6FQZNGKPAHOA6YVN9DJ5J97T3)
* [Landfill Methane Recovery](https://cdm.unfccc.int/methodologies/DB/0KHNES8D09H134V3TZDQ47C3LQL3H2)

#### Sources

* <https://verra.org/methodologies-main/>
* <https://climeco.com/creating-carbon-offsets-it-starts-with-a-methodology/>
