The efficiency of carbon offsetting through the CDM

7 December 2009

Carbon Retirement has conducted research into the efficiency of carbon offsetting through the Clean Development Mechanism (CDM), the UN standard for carbon offsetting. Under the CDM, projects that reduce emissions are set up in developing countries. Buyers in rich countries fund the projects by paying for carbon credits.

Most of the buyers are statutory, meaning they use the credits to comply with the Kyoto Protocol. Others are voluntary, meaning they are individuals and organisations that use the credits to offset their carbon footprint.

Carbon Retirement's research is the first end-to-end analysis of the costs involved at each stage of the CDM process, and shows how much of an end buyer's money is spent on the environmental project. The research shows that for every pound spent on CDM carbon credits by statutory buyers, 31p is spent on capital expenditure for the project and the project's maintenance costs. For voluntary buyers of carbon credits, some money also goes to the retailer, so the figure is slightly lower, at 28p.

A pdf summary of the research methodology and findings can be downloaded below. For media enquiries about this research, please contact us.