Reduction of GHG emissions through voluntary projects and the trading of offsets generated by these projects have experienced tremendous growth since 2004 and by some estimates now accounts for reductions of several million tCO2e annually.
By definition, voluntary emission reduction projects are not legally required and thus may not fall under the Kyoto protocol or other legislative frameworks. Thus the major risk and challenge in this segment of the carbon market is ensuring that these projects respect minimum standards for emission reductions. Projects must be proved credible and it must be shown that a ton of promised reduction truly delivers a ton of emission reductions.
Fortunately, in recent months several strict standards for voluntary reduction projects have emerged. Most notably there are the Gold Standard which endorsed by over 40 NGOs and the Voluntary Carbon Standard which was by the Climate Group the International Emissions Trading Association (IETA) and the World Economic Forum Greenhouse Register.
To fully understand the importance of project quality and emission reduction standards see Understanding Project Quality.