How Are Carbon Offsets Quantified?

Calculating the emissions reductions from carbon reduction projects determines how much carbon the project is preventing from entering the atmosphere.
 
First, the ”Baseline Scenario” is determined.  The “Baseline Scenario” is the amount of emissions that would occur without the project taking place. After the baseline scenario is calculated, the ”Project Activity Scenario” is determined. The “Project Activity Scenario” is the amount of emissions that occur if the project does take place. The total emissions calculated from the ”Project Activity Scenario” are subtracted from the emissions that occur in the “Baseline Scenario”  This equation yields the total amount of carbon the project will prevent from entering the atmosphere, measured in tonnes. This number is also the amount of carbon credits that the project produces, as each tonne of carbon reduced can then be converted into a carbon credit.
 
The methods for calculating the baseline and project activity scenarios follow an approved methodology, predominately based on the Carbon Development Mechanism (CDM) methodologies created by the UNFCCC of the United Nations. The calculations are then verified by an independent third party, such as a DOE (designated operational entity).
 
For more in depth information on the process of carbon offset quantification, and methodologies used to calculate emissions reductions, you can visit http://cdm.unfccc.int/ or http://www.epa.gov/sequestration/offset.html.