The Gold Standard for CDM is built on the foundations of CDM standards and methodologies, but requires explicit social and environmental benefits of its carbon offset projects which need to prove their sustainable development achievements. Projects are restricted to renewable energy and end-use energy efficiency, thus promoting a fundamental shift in energy use while promoting local economies. It excludes large hydropower projects above 15 MW capacity.
In 2006 the Gold Standard for voluntary offsets was established in order to provide the possibility to have certified projects outside the compliance market. Although the Gold Standard was not strictly for CDM projects, the use of CDM standards as a foundation (which are costly to meet) means that few projects outside of the compliance market are attracted to it. The Gold Standard VER still builds on the criteria applied for Gold Standard CDM projects but the main differences are:
*Simplified guidelines for “micro”-projects delivering less than 5 000 t of emission reductions annually, significantly lowering transaction costs
*Broader eligibility of host countries
*Lower requirements on the use of official development assistance (ODA)
*Broader scope of eligible baseline methodologies
*No need for formal host country approval
Gold Standard VER projects cannot be implemented in countries with an emissions cap, except if the emission reductions are backed by AAUs being permanently retired. In all ten projects have been registered under the Gold Standard. About 35 projects are official Gold Standard Applicants, representing about 4 million CERs and 500 000 VERs. Another 65+ projects are in the pipeline.
CERs are registered in the CDM registry and will be tracked in the Gold Standard registry as well. VERs will be registered in the Gold Standard registry which will be launched in early 2008.
The Gold Standard Foundation is a non-profit organization under Swiss Law, funded by public and private donors.
Voluntary Carbon Standard
The Voluntary Carbon Standard (VCS) is to provide a credible but simple set of criteria to confirm the integrity projects on voluntary carbon market.