A carbon project is additional when its credited reductions or removals would not occur without the incentive created by carbon finance. The principle protects buyers from paying for business-as-usual activity.
Main tests
Regulatory surplus asks whether the activity goes beyond legal requirements. Financial or investment analysis examines whether the project is economically attractive without carbon revenue. Barrier analysis considers technological, institutional and market obstacles. Common-practice analysis tests whether similar activities are already widespread.
Methodologies can combine these approaches or use positive lists and performance benchmarks where project-by-project financial analysis is not appropriate.
Why the counterfactual is difficult
Additionality depends on what would have happened without the project, which cannot be observed directly. Developers support the case with investment records, regulations, market data, board decisions and evidence of barriers.
Timing matters. The project should show that carbon finance was considered before an irreversible decision to proceed.
Additionality can change
A technology that is additional today may become common or mandatory later. Standards update tools and baselines to reflect changing costs, policies and market penetration.
Buyers should therefore check methodology version, project start date and whether the original case still appears credible.
Beyond a checklist
A project can pass formal tests while relying on optimistic assumptions. Strong due diligence asks how decisive carbon revenue is, what the project would do under lower prices and whether other subsidies or revenues already close the financing gap.
Sentinel Earth's project development process tests carbon and financial additionality during feasibility before substantial development cost is committed.
