The demise of the government's carbon offsetting scheme is good news for businesses

The government's decision to axe its Quality Assurance Scheme (QAS) for Carbon Offsetting at the end of June 2011 is good news for consumers, businesses and the climate.

The purpose of the QAS was to help organisations and individuals "make informed purchases of good-quality offsets" but it was considered so misguided that not a single member of the carbon offsetting industry body, ICROA, signed up to it. An assurance scheme that didn't approve any of the major offset providers was not reassuring at all, and risked confusing and alienating consumers and businesses.

Part of the problem was the Department for Energy and Climate Change's refusal to approve popular and effective verified emission reduction (VER) credits. This was illogical and counter-productive, as VER credits tend to be most popular with voluntary offset customers and meet all of the conditions laid out by the QAS for quality carbon offset credits. What is more, these carbon credit types provide much needed finance for clean energy and forestry projects in the developing world.

As thousands of businesses already trust these voluntary carbon offsets to help them meet their commitment to combat climate change, the government's stance caused confusion. To compound the problem, the scheme also approved the use of European Union Allowances (EUAs) that, while appropriate for compliance markets, are ineffective as voluntary carbon offsets and are not approved by the leading offset industry association.

While it is gratifying to some extent that the government has finally conceded that they "now believe it is for the market to set best practice for carbon offsetting", it is a shame that so much public money has already been spent propagating bad advice about offsetting. With only nine companies participated in the QAS and weak uptake from consumers and businesses, funding from DECC was required to prop it up. It is now the job of quality offsetting companies to set the record straight.

The job of sourcing quality carbon offset credits is made much easier by the existence of certifying standards such as the Gold Standard and Verified Carbon Standard. These certify VERs as meeting the six 'golden rules' of a carbon offset credit: that they are real, measurable, permanent, additional (i.e. that wouldn't have taken place without the finance provided by the sale of carbon credits), independently verified, and unique.

VERs work so well for voluntary offsetting because they not only meet the criteria of effective greenhouse gas emission reductions, but also improve livelihoods and so contribute to the company's stakeholder engagement efforts. Meeting this second criterion allows carbon offsetting to be used as a communications tool. Considered in this light, it is not surprising that the faceless QAS-approved compliance credits were so unpopular. Ending the scheme and its implicit, albeit contradictory, message that the government does not approve of VERs is helpful for both carbon offset vendors and customers.

In reality, making sensible, informed decisions about carbon offsetting has never been easier. ICROA provides a very clear set of best practice guidelines that all its members must follow, so choosing an offset provider that offers peace of mind is now a straightforward process.

Carbon offsetting, despite its rocky road to maturity, offers the only way for businesses to responsibly treat their unavoidable emissions. Certification schemes like the VCS and Gold Standard offer businesses the security they need to invest in and promote their carbon offsetting programmes as a key part of their CSR strategy. What a pity that the government didn't recognise this sooner.

Mark Chadwick is chief executive of carbon management firm Carbon Clear