How Are Carbon Offsets Verified?

Initial Project Verification
 
While the project is under construction, independent verifiers (DOEs) are employed to prove that this project would not have happened without the money from carbon credits (by checking the numbers on the price paid for electricity, cost of the equipment, cost of labor etc). They also confirm that the project is beneficial for both the global and local environment as well as has a positive social impact on the local residents. The verifier ensures that local inhabitants were satisfactorily consulted by the project owners.
 
Third Party Project Verification
 
Another independent body (the UN, the Gold Standard, or the Voluntary Carbon Standard) review the documents from the independent verifiers and decide whether all the information given is adequate and truthful. If this independent body confirms the verifiers’ information, the project can start receiving carbon credits, which are then bought by customers like you. The project owner receives money for these carbon credits, which allows him/her to pay back the bank loan, and pay the operating and maintenance costs of the plant.