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Offset Program Development for the University of California

Designing a quality carbon offset procurement program on ones own is beyond the reach of most organizations given the persistently poor credit quality on the offset market. In 2018, the University of California (UC), with a $47 billion annual budget, almost 25,000 faculty members, ten campuses and the Lawrence Berkeley National Laboratory, and a public-interest mandate, decided to invest time and resources into developing a quality offset procurement strategy. That decision created a three-year, all-campus, cross-discipline effort that generated an extensive analysis of existing offsets, methods for doing that analysis, and a bold approach to developing its own offset projects.

Ultimately, this effort resulted in the University system's unexpected decision to move away from offset procurement altogether. It proved too difficult to identify quality projects on the market, and the process of developing our own offset projects also was more difficult and risky than we anticipated. In July 2023, the UC system replaced its 2025 carbon neutrality goal with accelerated targets for direct decarbonization, and a fee per ton emitted (the funds it would have spent on offsets) to be reinvested into direct decarbonization efforts.

This website presents the results of this three-year effort with the hope that these materials can inform other institutions in assessing offset quality, identifying quality credits, initiating new offset projects, and developing a mission-aligned offset procurement program. The Berkeley Carbon Trading Project will continue this effort, and invites collaboration in studying offset quality, expanding and updating the project type quality assessments, and refining methods for performing these assessments. 

Here you will find:

  1. Summary of our three-year process
  2. UC's current policy - direct decarbonization
  3. UC’s offset criteria
  4. Methods for assessing offset quality against those criteria
  5. University-initiated offsets program
  6. Quality assessment of offset projects on the voluntary carbon market - The Berkeley Carbon Trading Project is continuing this work assessing offset project types and searching for project types that are not over-credited. We invite collaboration with other research teams.
  7. Other resources

1. Summary of our three-year process

From Fall 2018 to Summer 2021, the University of California (UC) used a Carbon Neutrality Initiative (CNI) grant to develop the system’s offset procurement strategy.

This project was motivated by one challenge and one aspiration. With growing concern about offset credit quality, the project team was tasked with identifying an initial set of offset project types that were not over-credited, and developing methods for expanding that list. Faculty and students across the campuses also expressed strong interest, to the extent that the University procures offsets, in focusing our offset procurement on activities that support the University’s core mission of research, education, and public service, and deliver University-valued co-benefits, such as community health outcomes. 

We began the CNI project by developing minimum standards and priority features for UC offset procurement in collaboration with faculty, students and staff across the campuses.

We then took a two-pronged approach to identifying offsets that meet these criteria. 

We developed our own university-initiated offset program, aimed at supporting offset projects that grow out of university research and involve students. By developing our own offset projects, we are better able to ensure additionality (that is, that we were actually having an impact and not just supporting activities that would have happened anyway) and we can also estimate emissions reductions according to the latest science. The second part of our approach was to perform research on offset project types, and in the process, refine methods for assessing offset quality at the protocol (project type) and individual project level.

The quality challenge: Offset programs have systematically and significantly overestimated their emissions benefits. This has been true from the first major carbon offset program, the first  UN’s Clean Development Mechanism (Cames et al., 2016; Haya, 2010), California’s offset program (see the improved forest management section of our Repository of Articles on Offset Quality, and Pierce & Strong, 2023 on California’s livestock protocol), to other project types on the voluntary offset market (see our study of REDD+ (reduced deforestation) offsets). 

Over-crediting occurs for two main reasons. Programs commonly allow projects to participate that would have gone ahead regardless of the offset income (are “non-additional”). Programs also often give projects leeway to make methodological choices that overestimate true project impacts. See our comment letter to the UN for a discussion of the underlying reasons quality has been so poor.

Team: This project was led by Barbara Haya, Director of the Berkeley Carbon Trading Project at the Goldman School of Public Policy and Research Fellow at the California Institute for Energy and Environment, under the guidance of co-directors Camille Kirk, who was Director of Sustainability and Campus Sustainability Planning at UC Davis, and staff at the UC Office of the President (UCOP) Energy and Sustainability department.

This work program was performed in collaboration with UC’s Carbon Abatement Technical Committee, made up of staff from each UC campus and the Lawrence Berkeley National Lab, and faculty and student representatives from across the UC system. 

2. UC's current policy - direct decarbonization 

As of July 2023, the University system replaced its 2025 carbon neutrality goal with goals for direct decarbonization of campus greenhouse gas emissions (see UC’s press release describing its new goals, and section III.C of UC’s Policy on Sustainable Practices for the formal policy). This shift aligns with the State of California’s Climate Crisis Act (AB1279) which requires an 85% direct reduction of all emissions (scopes 1, 2, and 3) by 2045. Under its current policy goals, the University would no longer rely on voluntary carbon offsets to reach its carbon reduction targets. Instead, all campuses will invest the funds they would have spent procuring carbon offsets, starting at $25 per tCO2e emitted and increasing 5% per year through 2030, into direct decarbonization of campus emissions. 

3.  UC’s offset criteria

UC’s minimum offset quality criteria and other offset priorities were laid out in sections III.C.6 and V.C.6 of UC’s 2023 Sustainable Practices Policy. This policy was developed in consultation with UC faculty, students, and staff over three years of engagement, including town halls, individual and group meetings, and comment periods. 

UC defined its minimum criteria for quality offsets as credits that: 

  • are likely to represent no more than their actual climate benefit (avoid over-crediting), 
  • have low risk of environmental or social harm especially in marginalized communities, and 
  • involve technologies that are scalable in line with reducing global emissions to no more than net zero by mid-century as outlined in the IPCC special report on Global Warming of 1.5C. 

In addition, priority was given to mission-aligned projects that:

  • advance research
  • engage students
  • have health and social justice benefits
  • benefit the university and surrounding communities
  • have climate benefits beyond the credited reductions

⇒  UC’s 2023 offset procurement policy – sections III.C.6 and V.C.6 of UC’s 2023 Sustainable Practices Policy 

4.  Methods for assessing offset quality

Our goal was to develop a process for assessing the quality of projects that could be widely used and apply to a wide range of project types.  

Offset quality can be assessed at the project or project type level. A project type is any set of projects that meets specific objective criteria. This can be all projects that use a specific offset protocol, or it can be a subset of projects using a specific protocol by objective characteristics such as location, size, or technology. We consider credits from project types real and additional if total credits generated by that type are unlikely to exceed the true climate benefit across the whole portfolio of projects.

We developed an over/under crediting analyses to review the quality of credits generated by individual projects and project types. This analysis recognizes that methods used to calculate emissions reductions may over-credit in some ways and under-credit in other ways. Credits are considered real and additional if sources of over-crediting, such as the participation of non-additional projects for a project type, or a non-conservative baseline for an individual project, is counterbalanced in full by sources of under-crediting, treating uncertainty conservatively. Conservative means that estimates of the climate benefit of a project, or portfolio of projects for a project type, are more likely to under-credit than over-credit. Large uncertainties require higher levels of conservativeness.

Over/under crediting analyses should take into account:

  • Additionality – would the credited reductions have occurred without the offset program or the University's climate protection policy? 
  • Baselines – what would likely have happened without the offset program or the University’s climate protection policy? The baseline is the scenario against which credited reductions/removals are estimated.
  • Leakage – do projects affect emissions outside of project accounting boundaries? Are potential increases in emissions due to project activities adequately avoided or accounted for?
  • Methods for estimating reductions/removals – otherwise, are the methods used to estimate emissions reductions/removals conservative and aligned with the latest science?
  • Durability – is the risk that any stored carbon will be released back into the atmosphere over a forty-year period managed and fully accounted for?

In addition, other criteria should be assessed at the project level. 

Note that this quality review process is in addition to the third-party verification process run by the offset registries. Third-party verification assesses whether the project meets the eligibility criteria of the offset protocol and whether reductions have been monitored and calculated in accordance with the offset protocol. This quality review process assesses whether the type or project meets our quality criteria.

Assessing project types

Project types undergo a three-step review process:

  1. Comprehensive over/under crediting assessment, seeking types of projects that are categorically deemed quality; the resulting procurement guidelines may include due diligence procedures that the buyer should carry out on individual projects before procuring credits from them. 
  2. Each assessment is then peer reviewed by at least two independent reviewers similar to informal peer reviews before journal submission or formal peer review by a journal. 
  3. Due diligence of individual projects before procuring credits from them as defined in the comprehensive assessments and general procurement guidelines.

Comprehensive project type assessments should start with a review of relevant literature on offset quality that has already been published (see our Repository of Articles on Offset Quality as a start). If a rigorous and up-to-date article has been published with a full over/under crediting analysis taking into account the list of factors described above, no further analysis is needed. 

These assessments should be performed by a team with the necessary interdisciplinary, sectoral, and regional expertise for the particular project type and location, including in carbon accounting, sectoral and regional culture, and factors affecting project implementation decisions. Members of the team should be free from conflicts of interest.

An example of a quantitative comprehensive over/under crediting analysis is our analysis of cookstoves offset methodologies. Our assessments of improved forest management methodologies and REDD+ (reducing emissions from deforestation and forest degradation) methodologies are examples of comprehensive quality assessments but without full quantitative over/under crediting analyses.

Alternatively, assessment of the work of other credit raters can be performed in order to be able to use others’ ratings.

Assessing individual projects

Individual projects or a set of projects by a project developer should also be peer reviewed by at least two reviewers. Internal reviewers can use their own expertise, consult published literature, and talk to individuals familiar with the project/location/sector as needed to assess their confidence in whether a project meets the quality and mission criteria. External reviews can also be requested, which would review the project and also the assessment of internal reviewers as appropriate.

⇒  Detailed methods for assessing the quality of project types and individual projects

5.  University-initiated offsets program

UC released a request for ideas (RFI) for university-initiated offset projects in March 2019. Its goal was to build a portfolio of potential offset projects initiated by UC faculty, students, and staff, and explore the viability of supporting a portfolio of full-scale university-initiated projects with offset payments.

This program was inspired by an interest in exploring how the University can invest its offset expenditures back into its direct mission and the critical role that universities play in climate mitigation – developing and testing innovative climate solutions and educating the next generation of solution creators. Since the most difficult challenge with market offsets is additionality (knowing whether the credited reductions would have happened regardless of the offset payments or university climate goals), the best way for UC to ensure additionality is to initiate projects itself. The University is then much better able to trace the influence it has on climate change mitigation. By developing its own projects, the University can also draw on university experts in performing the GHG emissions and removals benefits to ensure that the emissions impact calculations, and credits issued, are aligned with the latest science. 

UC chose twelve projects for pilot awards. With these awards, each team was tasked with developing an actionable proposal for a full-scale university-initiated offset project. UC envisioned supporting a portfolio of university-initiated offset projects with purchase agreements that reflect the support needs of the individual projects, possibly involving forward delivery contracts or pre-payments. Just like other offset projects, all university-initiated offset projects must pass the same rigorous quality review process. 

We learned a lot through this process and are happy to share resources and lessons learned.

⇒  University-Initiated Offset Project Pilot Awards

⇒  2019 RFI Website - see guidance and resources on this site

⇒  More info

6.  Quality assessment of offset projects on the voluntary carbon market

After the review process, both project types and individual projects are ranked under one of five tiers depending on their quality: 

Tier 1  —  Highest quality; meets the minimum quality standards listed above and also has additional co-benefits and/or climate benefits 
Tier 2  —  Meets the minimum quality standards
Tier 3  —  Meets minimum quality standards with some acceptable compromises. The purpose of this tier is to expand the set of acceptable project types until offset quality on the market improves. This tier includes initial project type assessments that are advanced enough to be confident that the project type meaningfully supports climate mitigation and does not significantly over-credit, but which still needs a full over/under crediting analysis. 
Tier 4  —  Not categorically accepted, but individual projects could meet the minimum quality standards if they meet specified due diligence requirements
Tier 5  —  Protocols systematically over-credit; it is unlikely to find individual projects that meet UC criteria

Note that before procurement, credits should go through the due diligence process described in the guidelines for the particular project type. 

Over time, as more comprehensive analysis is performed, we will continue to add project types into the tiered lists.  

⇒  Tiered spreadsheet with links to project type reviews

7.  Other resources for offset buyers and university project developers

⇒  Voluntary Registry Offsets Database
⇒  See these public comments to the UN Article 6.4 Supervisory Body for a deeper discussion of offset quality challenges and the underlying reasons why offset quality has been so persistently poor
⇒  UC’s equity weighted social cost of carbon

Last updated May 6, 2024