One of the questions often asked by Renoster's clients is whether there are any specific project vintages that are better to buy than others. Our answer is that credits should not be judged based on any particular vintage but rather the project they come from as holistically as possible. Here’s why.
Since most projects use predictive static baselines and have different ways of measuring project emissions, the carbon benefits of a project become clearer over time (for more insight into the difference between static and dynamic baselines, read this blog). Variances in modeling and measurement techniques can lead to periodic fluctuations in crediting that might not be representative of a long-term trend. The idea is very similar to the difference between weather and climate. If a project is underperforming year by year, then one good vintage may not be enough to offset the rest of the project’s performance.
To illustrate this concept, let’s look at a hypothetical example. A project has existed for 10 years, and a client asks Renoster to conduct a review of this project to gauge whether to purchase credits from it or not. As part of that review, Renoster produces a dynamic credit comparison showing that by the end of the 10-year period, the project is over-credited. Renoster’s models are so perfect, the credits generated from them can be considered absolute truth. (Okay, we’re not actually perfect, but we’re trying). Here’s what the comparison looks like:
Looked at another way, here’s a graph showing the cumulative difference between the project’s issued credits and Renoster’s estimated credits:
The gap between the project’s issued credits and Renoster’s estimated credits widens every year, except for the 2016 vintage. But even that one year is not enough to compensate for the over-crediting that took place before it, and the credits from 2016 become more ecologically devalued the further in time we go as the project is once again over-credited year-by-year.
So, should you buy credits from this project? Should they only be purchased from the 2016 vintage? To answer the first question, that is up to the client. There are many reasons why someone would purchase carbon credits. Renoster’s reviews are designed to give clients a holistic view of projects by providing them with quantitative assessments of project performance at various points in time plus qualitative assessments of co-benefits, natural risk, and other factors. As for the second question, we would argue that it does not matter which vintage the credits are purchased from, only that the client considers the performance of the project as a whole to date.
