GHG Credit Buyer's and Seller's Report

Useful Information for the Current Market

Notwithstanding the vast progress that has been made over the past 15 years, there is still no national or international agreement on what constitutes a "creditable" emissions reduction in a domestic early action crediting or mandatory emissions trading system, and rules for international crediting mechanisms such as the Clean Development Mechanism are still being developed.

Until the necessary policy frameworks are in place, tons bought or sold in today's market cannot be "certified," since there is no official standard against which to carry out a certification. Nevertheless, expert insight into likely future regulatory crediting frameworks, the current status of the GHG market, and empirical experience with projects and transactions can provide a great deal of information to potential buyers and sellers of emissions reductions or offsets in today's market.

In the context in which companies currently operate, buyers and sellers of potential credits need a range of transaction-related information in order to structure and evaluate a potential transaction, such as:

How credible are the emissions reductions or offsets tons being bought or sold (as measured by variables such as additionality, baseline clarity, and leakage)?

How accurate are estimates of the emissions reduction or offsets?

Would the tons being bought or sold qualify for voluntary and/or mandatory markets?

How clear is the ownership of the reductions or offsets?

How do characteristics of the reductions or offsets being sold compare to other projects in today's (or the recent) market, and what do they suggest regarding the reductions' market value?

TC+ES has extensive experience in the assessment of project-based emissions reductions. The firm has worked on or evaluated hundreds of GHG transactions, and can deliver considerable value added to buyers and sellers of GHG credits. With its wide-ranging offset project experience, TC+ES can assist companies in carrying out a "Seller's Review" or "Buyer's Review" of the likely future credit performance of emissions reduction projects or purchases. TC+ES has developed a standardized Seller's and Buyer's GHG Transaction Assessment reporting format which forms the basis for this kind of review. Clients can use TC+ES's assessment reports to:

confirm or modify the client's own assessment of the emissions reductions;

understand potential challenges to the company's ownership of credits deemed creditable in the future;

assess the likely transaction costs associated with "papering" the reductions for offset purposes, including legal and monitoring costs;

understand other transactions of emissions reductions or offsets of similar scope and character.