> For the complete documentation index, see [llms.txt](https://open-carbon-protocol.gitbook.io/ocp-methodology-requirements/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://open-carbon-protocol.gitbook.io/ocp-methodology-requirements/sections/7.1.-quantification-of-greenhouse-gas-emissions/7.4.-leakage.md).
# 7.4. Leakage
Leakage refers to the potential for emissions to increase elsewhere due to the project. Two sources of leakage are **market leakage** and **activity displacement.**
* **Market leakage** occurs when a project influences supply & demand market dynamics, resulting in the emission reduction/removal being done elsewhere in the market
* **Activity displacement** refers to a specific activity being displaced within an area
A methodology must explicitly **assess whether the activity type is structurally prone to emissions leakage**. It must describe the steps to **quantify leakage risks,** **how to mitigate against the unique leakage risk** posed by this project type, and **set an appropriate monitoring approach for materal leakage risks**. A comprehensive assessment of the leakage potential must use peer-reviewed literature and established modeling tools, where relevant (e.g., Oil Climate Index, market elasticity studies).
Some sectors are more at risk of material emission leakage than others, as listed below \[[Source: BeZero](https://bezerocarbon.com/insights/bezero-carbon-risk-factor-series-leakage)]. Methodologies authors and experts should take these risk levels into account, although methodologies in all sectors must account for leakage risks.
| Lower Risk of Leakage | Higher Risk of Leakage |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
|
Industrial Processes, Waste, Transport
- Upstream emissions associated with infrastructure construction is usually small relative to carbon reduction
|
Nature Based Solutions: IFM, ARR, REDD+
- Forestry projects often result in reduced supply of timber; without a reduction in demand, this need will be met from timber from other sources
- ARR projects often displace farming activities which would have released methane emissions
|
| |
Clean Cookstoves
- Traditional stoves may continue to be used for additional cooking space, space heating or insect repelling.
|
The methodology must require project developers to submit a robust plan to mitigate these risks. This might include:
* Conservative baseline setting
* Robust eligibility criteria such that only the most impactful and least easily substituted emission sources are targeted
* Mandatory buffer pool requirement based on leakage potential
* Ongoing monitoring policies, appropriate to the type of identified leakage risk.
Leakage risks that are not mitigated must be addressed in the quantification equation, as described above.
A diagram or figure mapping the leakage potential is encouraged for this section.
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