Aligning science, rulemaking, and practice to strengthen carbon crediting

Carlos F. Gould 

Results-based climate finance mobilizes private capital for climate mitigation by paying for verified outcomes [1]. Multiple independent evaluations have shown that credited reductions routinely overstate actual ones—by 3x to 14x across sectors [2–8]—but understanding of why or what to do about it is highly variable. To guide effective policy response, we develop a framework that decomposes the gap into three sources of error: implementation (what projects do and report), rulemaking (the methodologies that shape what is allowed), and the state of the science (what we know about the world). Focusing on cookstoves, where a sector-wide analysis estimated a ninefold gap [9], we show that most of the discrepancy reflects not what projects did but what approved rules permitted and what the science embedded in those rules has since overturned. Correcting biased benchmarks and outdated science, we estimate credits exceeded actual reductions roughly fivefold. Under reformed protocols, credits would be roughly 80% smaller but overstate reductions by only 1.6-fold. Every credit that does not correspond to a real reduction is an unaccounted emission warming the planet, purchased by someone who believed otherwise. For cookstoves, the stakes extend beyond carbon: household air pollution kills 3.2 million people per year [10], and carbon finance is one of the few mechanisms reaching them.