What is double counting and why is it such a big deal?

Thursday, April 29, 2021

For anyone who has spent time looking into the flaws of offsetting, double counting is an issue that comes up time and again. But what is it and why is it such a hot topic? Let’s get down to the basics.

First, a quick recap:

Each tonne of CO₂ emissions reduced or removed from the atmosphere by an offsetting project creates one carbon credit. Companies, nations, and individuals can invest in these projects directly or buy the credits. In addition, a good carbon credit ensures that one tonne of CO₂ is actually reduced or removed from the atmosphere entirely because of the project.

Double counting refers to a situation where two parties claim the same carbon removal or emission reduction. 

How does double counting happen?

As absurd as it is, missing links between theory and practice have left room for double counting to happen quite often. 

Commonly, the two claiming parties are an organization offsetting its emissions and the host country of the project trying to reach its nationally determined contribution (NDC), or climate target, under the Paris Agreement. 

This is highly problematic, as two parties cannot claim credit for the same climate action. If a company claims to be carbon neutral through offsetting that is also counted into the project’s host country goals, as far as the climate is concerned, the company hasn’t actually done anything extra. On the other hand, double counting can also disincentivize countries from implementing much needed climate action. 

Either the so-called carbon inventories and reporting done by the host countries must be able to adjust to offsetters’ claims, or the offsetting claims must be adjusted. These are systemic solutions that require the cooperation of multiple different stakeholder groups. 

So, what would these solutions look like?

Adjusting national climate targets

The first option is to implement national registries of all voluntary carbon offset projects and deduct them from national greenhouse gas inventories and climate targets. These are called “corresponding adjustments”. 

Corresponding adjustments mean that the amount of CO₂ reductions or removals claimed by the offsetter through the purchase of carbon credits are deducted from the project host country’s national greenhouse gas inventory. This means that these CO₂  reductions or removals will not contribute to the host country’s national climate targets. In this way, emission reductions or removals will only be claimed once: For instance, in the case of corporate offsetting, only by the company making the compensation claim. 

Corresponding adjustments would also mean that private climate action would go beyond what is already set in national policies. To be truly impactful, offsetting should always be additional to national climate targets for an increase in overall climate ambitions. 

However, the industry hasn’t quite agreed on this proposed solution. 

The world’s largest voluntary carbon standard by volume, Verra, recently announced that it will not require corresponding adjustments for carbon credit transactions that have happened after the Paris Agreement was signed. Verra argues corresponding adjustments could hinder climate finance to developing countries and create needlessly complex accounting systems. Verra’s stance echoes that of many large offset providers. 

Verra’s position differs completely from that of the second largest offset program, Gold Standard, which has proposed a phased timeline that would mean all its offsets will require corresponding adjustments by 2025. Gold Standard has argued that avoiding double counting is essential to ensuring the integrity of carbon markets.

However, the voluntary carbon market isn’t the only carbon market out there. The voluntary carbon market co-exists with the regulated compliance market, which is where countries can offset their emissions using international market mechanisms set out in Article 6 of the Paris Agreement. Unfortunately, the signatory countries of the Paris Agreement have yet to agree on the rules of these market mechanisms, and corresponding adjustments are also needed in this market. Finalizing these rules is a key agenda item for COP26, scheduled to be held at the end of the year in Glasgow. The hope is that if the compliance market can agree on strong rules that avoid double counting, these same mechanisms could be applied to the less regulated voluntary carbon market. 

Changing the claims that offsetters can make

Another solution to the double counting issue would be differentiating claims into offset claims and “contribution claims”. 

Under the contribution model, companies finance climate action and help countries meet their NDCs without making a compensation claim. The contribution model is quickly gaining traction and is endorsed by Gold Standard and the Science Based Targets Initiative , among others. The new model enhances transparency and honest communication, avoiding potentially misleading PR campaigns around offsetting. It also incentivizes companies, organizations and individuals to fund climate action and support the goals of the Paris Agreement.

How can offsetters avoid double counting?

Offsetting is a useful tool for businesses, organizations and individuals to take responsibility for emissions that cannot yet be completely avoided or minimized. But when an offset claim is made, that statement should be grounded in truth. It is simply not acceptable to make a compensation claim using emission reductions or removals that have already been counted and claimed by the host country of the project. Contrary to the intention, this in fact results in net increase of emissions in the atmosphere as only 1 tCO₂ has been avoided or removed instead of 2 tCO₂  - one by the company and one by the host country.

At Compensate we believe in sticking to the truth. Double counting has to be avoided either through corresponding adjustments or by using an alternative contribution claim. At this point in the ever worsening climate crisis, there is simply too much at stake to make empty promises. 

Compensate’s project criteria and evaluation process ensures double counting is avoided in a few ways. First, we purchase carbon credits issued before 2020, which are not affected by the new NDC accounting rules required of countries after 2020 under the Paris Agreement. We also monitor host countries’ NDCs and do not purchase credits from developed countries, if the project developer has not ensured the exclusion of the emission reduction from national greenhouse gas registries.

While the industry looks for solutions, for offsetters it can be hard to avoid double counting in practice. Even carbon projects certified under international standards don’t successfully avoid this every time. Finding a climate partner that is knowledgeable and transparent about the issue is a good first step.


Want to learn more about offsetting and the workings of the voluntary carbon market? Download our white paper here. 

When an offset claim is made, that statement should be grounded in truth. It is simply not acceptable to make a compensation claim using emission reductions or removals that have already been counted and claimed by the host country of the project. Contrary to the intention, this in fact results in net increase of emissions in the atmosphere as only 1 tCO₂ has been avoided or removed instead of 2 tCO₂  - one by the company and one by the host country.

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