Uncertainty

• Carbon Markets are still inherently uncertain - the majority of projects operate at the forefront of scientific understanding of the systems they operate in and the best technology for measuring the impact of specific interventions.

• The way we approach uncertainty at the OCP is to build processes to capture new developments and ensure they are integrated into past, present, and future credit calculations.

Accounting for Uncertainty

OCP Level

• Annual Audit: All methodologies and projects are audited every year to ensure they are still up-to-date. If they aren't, a major update is triggered, including the formation of a new expert panel.

• We believe that companies should move to a 'Living Ledger,' where carbon credits are treated as assets, recorded on a company's environmental balance sheet next to its environmental liabilities. This allows companies to ensure any carbon credits they buy are always matching their environmental liabilities, reducing the risk of uncertainty. Reach out to [e-mail] if you're interested in piloting this approach.

Methodology Level

• Section 2 (Conservativeness) of every methodology outlines ares of uncertainties and describes how conservative quantifications techniques are applied to mitigate them.

• In Section 7 (Quantification of GHG Emissions), we encourage methodology developers to think about dynamic baselining (i.e. including monitored variables in the baseline emission calculation) so that the baseline can be recalculated at every issuance event.

• In Section 8 (Permanence), uncertainty must be assessed and documented as part of the permanence & reversal risk assessment.

For more information, read our OCP Methodology Requirements:

OCP Methodology Requirements

Project Level

• In the case of a reversal event, credit owners will be compensated via the OCP Buffer Pool or Project Insurance.

• In the case of excess issuance or over crediting, the OCP will cancel credits and compensate owners.

• If projects are found to be under-crediting, we work with the Project Developers and credit owners to rightsize the credits.