A project that stops deforestation inside its boundary has only reduced emissions if the deforestation stopped, rather than relocating. Leakage accounting is the deduction that separates those two outcomes, and it is one of the least rigorously handled parts of most project designs.
Two Kinds, Handled Differently
| Type | Mechanism | How it is assessed |
|---|---|---|
| Activity-shifting | The prevented activity relocates nearby | Monitored belt around the project |
| Market | Withdrawn supply raises price, production rises elsewhere | Methodology-specified default factor |
Activity-shifting is empirically observable if you monitor for it. Market leakage is not traceable to specific actors at project scale, so standards handle it with conservative default deductions rather than measurement.
The Leakage Belt Is a Second Project
The common failure is treating the belt as a formality, a band drawn on a map and monitored casually while the project area gets careful attention.
That asymmetry is self-defeating. Leakage is a deduction, and an uncertain deduction is resolved conservatively against the project. A poorly-measured belt produces a larger deduction than a well-measured one showing the same physical outcome.
The belt therefore needs what the project area needs: a defined boundary, stratification appropriate to its heterogeneity, and a sampling design capable of detecting change at the scale that matters.
Where Leakage Interacts With Project Design
Some project designs generate less leakage by construction. Interventions that raise productivity on the land already in use, rather than restricting access to it, displace less activity. Projects that secure genuine community agreement and provide alternative livelihoods displace less than those that rely on enforcement.
That is worth planning for at design time, because it is one of the few carbon-accounting parameters a project can improve through the way it operates rather than the way it measures.
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