Systems & Procedures

Carbon Accounting Protocol

The carbon accounting protocol describes how the sale of carbon credits from producers with registered offset activities is managed by the project. There are three components to this protocol:

• risk buffer
  
• definition of credits
  
• project database

Risk Buffer

The risk buffer is a reserve of unsold carbon credits. The aim is to allow the Carbon Fund to cover any unexpected shortfall in carbon credits supplied to purchasers. The project operational manual should justify the size of the risk buffer and state how it is maintained.

The size of the risk buffer should be determined by the risks associated with carbon credits sold via the Carbon Fund, for example:

Loss of sequestered carbon due to fire in forestry projects
Producers failing to maintain offset activities for specified timeframes
Inaccuracies in carbon modelling or baseline assumptions
Producers defaulting on sale agreements

The Scolel Té project maintains a risk buffer of 10% of carbon sold via the project.

return to menu

Definition of credits

Documentation issued to purchasers of carbon credits from the project should state how the carbon offset potential of the credits has been calculated and what the verification status of the credits is.

Verification status
Carbon credits sold through the Clean Development Mechanism are known as Certified Emissions Reduction (CERs). Only projects that have gone through the process of validation and verification may sell CERs . Carbon credits sold through a voluntary carbon trading scheme are known as Voluntary Emission Reductions (VERs). For more information go to verification.

Ex-ante or ex-post credits
Carbon credits may either be purchased ex-post (i.e. after the carbon offset has been generated) or ex-ante (i.e. in advance of the offset being generated). In most cases VERs from forestry projects are sold ex-ante (this allows carbon income to be generated before activities are established to cover start up costs). However, it is possible that some purchasers will request ex-post credits as these credits will have a much lower risk than ex-ante credits. The project administration must discuss with the purchaser the type of credit that it can offer.

Crediting period
There is currently no universally accepted crediting period for carbon offsets generated by project activities and different purchasers may have different requirements. The length of the crediting period will influence the number of carbon credits that can be generated by a given offset activity - in general the shorter the crediting period the fewer the number of credits produced. The project administration must therefore ensure that purchasers requirements are met in sale agreements made with producers. For more information on how to meet purchasers' requirements with respect to crediting period see carbon crediting methodologies.

The Scolel Té project has developed a carbon accounting protocol which involves the internal issuance of carbon credits to producers with registered plan vivos. This system allows more flexibility in supplying carbon credits to purchasers and making sale agreements with producers. Read more ...

return to menu

Database

The project should maintain a database with details of all registered plan vivos and carbon transactions. This will allow the project administration to keep track of all carbon credits registered with the Carbon Fund and sold to purchasers and to ensure that no double counting takes place (i.e. the same carbon credit being sold twice).

It is very important that information held in the database matches that contained in documents issued to producers and purchasers. All carbon sold through the project should be identified with a unique serial code that enables the credits to be traced back to individual producers. It is essential that information held in the database accurately reflects reality and any modification to plan vivos or sale agreements must be recorded in the database.

A Plan Vivo Database (an MS Access database) is available from this website. The database contains examples of the type of information that will be required. Download the database and instructions.

return to menu