Zerofootprint Guides: Offsetting, Part 2 - The Additionality Issue In Offsetting
by Ron Dembo, Zerofootprint on 07. 2.07
One of the biggest problems with offsetting is ensuring 'additionality' – proving that the offsets that you are buying in order to counterbalance your carbon emissions would not have happened without yours and other similar contributions. Often the projects sound intrinsically worthwhile – protecting threatened original forest, supporting conversion to renewable energy, installing low energy light bulbs, etc. - and sometimes it is hard not to have a sneaking suspicion that they would have been done irrespective of the offset schemes. And if that is the case, someone is profiting from your good intentions, and it isn't Mother Earth.
Ensuring additionality is essential for the credibility of offsetting. The whole purpose is to fund new initiatives to save or store carbon, but proving that projects are new and would not have happened anyway can be problematical.
One of the difficulties is the very fact of intrinsic worth that many offset projects appear to have over and above the carbon credits they might generate. Of course original forest should be protected, but isn't someone doing that anyway? And that power plant in India that is converting from coal to renewable agricultural waste – doesn't that make economic sense for the power company even without the benefits of the carbon credits that it will be able to sell? And since distributing low energy light bulbs in African townships is going to cut the township dwellers bills and free up desperately needed energy for local economic development, won't the local government want to do that of its own accord?
Part of the problem is the way in which Kyoto has framed offsetting. It was conceived as a mechanism by which the primary producers of carbon – the developed countries – could transfer funds and skills to developing countries to help them evolve low carbon economies. The idea is to create a win-win situation. Developing countries in Africa, Asia and Latin America get help to build renewable energy generation facilities, to convert villagers from cooking with kerosene, to capture and use methane from agricultural and household waste, and so on. European, North American and other developed countries benefit because overall carbon emissions are reduced, and they are better able to meet their quotas under Kyoto. To put it into accounting terms, the host countries gain real economic and environmental credits which they can sell to developed countries to help them reduce their carbon debits.
But Kyoto goes even further. It is a specific requirement of the protocol that offsetting schemes must bring social and environmental benefits to the communities that host the projects. Anyone wanting to develop projects under Kyoto's Clean Development Mechanism (CDM) or Joint Initiative (JI) schemes must show that the process of achieving carbon reductions, whether it be by installing a wind turbine or planting trees, will benefit the local people and ecology over and above the sale of the carbon credits. The benefits might include access to energy, or health benefits from using more efficient cookers, or sustainable harvesting of timber, etc. Providers in the voluntary sector have adopted this approach too, and social and environmental benefits are even more heavily emphasised by the voluntary Gold Standard for offset projects.
Some argue that because climate change is such a huge and imminent threat, we should go for maximum carbon reductions, ignoring local social and other issues, but most people seem to feel that it is only right and just that if we are asking the developing world to help us clear up our environmental mess, that it should be done with a sensitivity to local interests.
Also, not all offset schemes are located in the developing world. Many voluntary schemes include projects in North America, Europe, etc. In fact, there is a huge amount that can be done in these regions in terms of protecting ancient forest, reforestation, promoting renewable energy, funding energy efficiency measures, etc. Here too, projects often seem to have worth beyond carbon credits.
But because many offset schemes have this intrinsic worth and local benefit, it does not mean that they would have gone ahead regardless. There are often formidable technological, skills or funding barriers to the projects, and this is what offset schemes help overcome. Rural villagers can face all three if they want to convert from their kerosene stoves, or capture methane from the dung of their animals. In Bolivia, offsetting has helped the government protect two million acres of forest that had been earmarked for logging. In other cases, the prospect of selling carbon credits can tip the scales for investors otherwise hesitating to fund renewable energy or forest restoration projects.
And it is not just in the distant projects in developing countries where these issues arise. As part of its sustainability programme, the District of Maple Ridge in British Columbia, Canada, has launched an initiative to restore ecosystems in the area by replanting indigenous trees and removing invasive species. The aim is to eventually plant 300,000 trees, which will sequester around 1 million tonnes of carbon dioxide over an 80 year period. While the municipality is providing the land, offsetting is funding the trees and planting programme.
Proof of additionality is a condition of CDM and JI projects receiving approval. It is also built into the Gold Standard, and promises to be part of the Voluntary Carbon Standard currently under development by the International Emissions Trading Association, the World Economic Forum and the Climate Group. In an industry as young as offsetting, and one which is under scrutiny and constant attack by skeptics, it is essential that additionality is transparent and verified by a credible third party.
Meanwhile, forestry-based offsets come with an extra additionality. Trees bring with them a host of benefits, such as shade, sustainable timber and fuel, habitats for wildlife, soil erosion prevention, water source protection, food in form of fruits and nuts, etc. All these are over and above any carbon sequestration they might provide, and all of them come for free.
I agree with much that was said in this article about offsetting. I personally believe offsetting my greenhouse gas emissions is a poor alternative to actually reducing my emissions. So I put my focus on actually reducing my greenhouse emissions through a host of means - renewable energy, energy efficiency, small passive solar house design, growing my own food, using bikes or walking or public transport, minimizing my consumption, trying to buy green products, and so on. But it is clear that me and my wife can't eliminate all of our emissions. Even after we have implemented all of these direct measures (for instance, I have to finish putting up a solar water heater for my hot water and I plan to pump cold water from the bottom of my well to cool the house in summer and so on), we will still have things that we do that contribute to global warming. As an example, my wife is currently at an academic conference about CSR in Vienna which she has travelled to using air transport. While we generally frown upon air travel, we understand and accept that there are times and circumstances that make it the best option. We decided that going to Vienna would be best in this time and circumstance for her to go by plane. However, she has to attend another academic conference in Barcelona in the fall, and in that case air travel is definitely not warranted. She will be taking a train. But what to do about the large emissions she creates flying to Vienna? In that case, offsetting is better than not doing anything. But how to offset? How can I know that if I buy offsets, the money isn't either being needlessly wasted or simply going straight into someone's pocket. The truth is I can't know. The industry is too young. Many issues of credibility have yet to be sorted out. I believe in time many, most, of these issues will be solved and offset organizations and companies that command the highest respect and trust will emerge. But we are not there yet. Buying offsets now is much about blind faith and for many people do act simply as 'indulgences'. So I offset directly - because I have the opportunity to do so. Living out in the countryside in a somewhat forested area with 3 hectares of land, I have many areas on my land and surrounding my land and in my local area where trees should be planted. So I grow pine trees from seed for later transplanting as my method of offsetting. I see where my money and efforts are going, so I can trust that my offsetting isn't a waste of time or money. And on top of that I get the additional benefits you mentioned above regarding reforestation. Right now I am constantly planting pine seeds to offset a number of things - my wife's occassional work-related travelling, driving our Yaris around to do the shopping, using the gas-powered generator for gardening power equipment (chainsaw, weedeater, triturator, etc.), and so on. I even planted sixty pine trees to offset the travelling emissions of a Quebecer who came to do Wwoofering this summer at my place. I am lucky to be able to offset directly. Planting pines has become a physically and mentally relaxing activity. But not everyone will have ways to offset directly or indirectly. Some will only have the option of blind faith. All they can hope is that their money ends up doing some good. All we can hope is that money is not being needlessly squandered or 'misappropriated'.
As a "layman" I didn't know at the time that it was called "additionality" but I arrived at the same conclusion sometime back independently.
This is a very muddy write up and it’s not clear what's being argued at various times, so excuse me if I am misunderstanding what's being said. It is clear that you're exploring offsets but it’s not clear what the conclusion is; assertions are made and then contradicted multiple times. With that said, I have a few comments:
Just because an offset makes economic sense without an offset program doesn't mean it will happen. This is a fact.
However, regardless of the aforementioned fact, if a carbon capture practice becomes more economical because of an offset program than there will be positive externalities for Mother Earth beyond what would have happened anyways. For instance, if you're a farmer and you were already practicing carbon capture tillage techniques but now you get an $8000 check every year for practicing those techniques, others will take notice. So, now your neighbor, who wasn't practicing these techniques and otherwise would not, is interested in making that extra money and starts practicing these techniques. This practice then spreads exponentially until it is the rule rather than the exception.
In this sense, arguing that additionality is reason enough not to proceed with a carbon offset program is poor at best. In fact, I'd argue that additionality in this sense need not be corrected within the structure of an offset program. Those that are already doing the right thing should be rewarded along with those that only now want to do the right thing. There's enough money to go around. Why would we want to create a disincentive to do the right thing until one is enrolled in an offset program? If that's the case, then people will chop down forests so that they can profit off of selling the wood, then, after joining an offset program, profit off of replanting it. In my opinion, this is counter productive.
I should add that I am talking about offsets under a cap-n-trade program. Offsets that don't fall under a cap program are truly valueless.
This is a very muddy write up and it’s not clear what's being argued. It is clear that you're exploring offsets but it’s not clear what the conclusion is; assertions are made and then contradicted multiple times. With that said, I have a few comments:
Just because an offset makes economic sense without an offset program doesn't mean it will happen. This is a fact.
However, regardless of the aforementioned fact, if a carbon capture practice becomes more economical because of an offset program than there will be positive externalities for Mother Earth beyond what would have happened anyways. For instance, if you're a farmer and you were already practicing carbon capture tillage techniques but now you get an $8000 check every year for practicing those techniques, others will take notice. So, now your neighbor, who wasn't practicing these techniques and otherwise would not, is interested in making that extra money and starts practicing these techniques. This practice then spreads exponentially until it is the rule rather than the exception.
In this sense, arguing that additionality is reason enough not to proceed with a carbon offset program is poor at best. In fact, I'd argue that additionality in this sense need not be corrected within the structure of an offset program. Those that are already doing the right thing should be rewarded along with those that only now want to do the right thing. There's enough money to go around. Why would we want to create a disincentive to do the right thing until one is enrolled in an offset program? If that's the case, then people will chop down forests so that they can profit off of selling the wood, then, after joining an offset program, profit off of replanting it. In my opinion, this is counter productive.
My comments are out of order =(
"someone is profiting from your good intentions, and it isn't Mother Earth."
The single, most practical, and realistic reason not to engage in personal offsetting. Individuals should never pay to clean up an environmental mess made by someone else, nor should they assume that by doing so this balances out their own indebtedness.
Doing so merely muddies the issue, enervates the limited time and resources they have to invest in environmental issues, and allows the carbon brokers and intermediaries laugh all the way to the bank.
Mark,
No one should pay to clean up messes made by someone else?
Paying someone else usually is the most cost effective way to get environmental benefits the quickest. If capturing and converting the methane from from the farmer's cow's waste costs you 25cents per ton but for you to reduce the emissions from your Prius costs $5 per ton then in order for us to get the most environmental bang for our buck, we should be paying the farmer first to reduce his emissions. Then we should be paying for the next most cheapest reductions, then the next, and so on until we get to the point where the cheapest reductions come from you adding more technology to your Prius. (Also known as taking care of the low hanging fruit)
Yes, people/banks will be employed in order for the transactions to happen but that doesn't somehow violate the good that the system is doing. It is simple competition: if you can provde the same service for cheaper than the local bank that might be charging an arm and a leg then do it and you'll get a lot of business...
It realy is that simple.
I swear, Discovery Channel needs to do a special on cap-n-trade and how these systems work so that a wider audience understands how the incentives run and and why cap-n-trade has worked so unbelievably well in the U.S. nox and sox markets. (and will in Europe once the market begins to mature and the kinks get worked out, which is happening)
Mark,
No one should pay to clean up messes made by someone else?
Paying someone else usually is the most cost effective way to get environmental benefits the quickest. If capturing and converting the methane from from the farmer's cow's waste costs you 25cents per ton but for you to reduce the emissions from your Prius costs $5 per ton then in order for us to get the most environmental bang for our buck, we should be paying the farmer first to reduce his emissions. Then we should be paying for the next most cheapest reductions, then the next, and so on until we get to the point where the cheapest reductions come from you adding more technology to your Prius. (Also known as taking care of the low hanging fruit)
Yes, people/banks will be employed in order for the transactions to happen but that doesn't somehow violate the good that the system is doing. It is simple competition: if you can provde the same service for cheaper than the local bank that might be charging an arm and a leg then do it and you'll get a lot of business...
It realy is that simple.
I swear, Discovery Channel needs to do a special on cap-n-trade and how these systems work so that a wider audience understands how the incentives run and and why cap-n-trade has worked so unbelievably well in the U.S. nox and sox markets. (and will in Europe once the market begins to mature and the kinks get worked out, which is happening)
DD,
No one should pay to clean up messes made by someone else?
>>that's right; frankly, it is not my responsibility to limit greenhouse gas emissions from huge corporations. If my elected officials can't force them to do it, I certainly am not going to step in, take money out of my kid's college fund, and write a check to an offsetter to do this. I'm sure you will agree that for me to do this is absurd.
in order for us to get the most environmental bang for our buck, we should be paying the farmer first to reduce his emissions.
>>>No, 100 percent disagree. I bought the Prius and I bought the gas to run it at market prices, my duty to the environment is finished, just like the duty of the farmer was when he set up his methane generating operation. Other than participating in the market, there is no green responsibility on a personal level. I find this argument completely strange.
Also known as taking care of the low hanging fruit
>>>I agree its really obvious - mandate the farmers to trap their methane, it's really simple, just force them to do it via regulation.
Mark,
Cap-n-trade is a regulation. I am not arguing that you yourself should have to write a check to the farmer (that definitely would be inefficient), the costs would be built into the price of products. but, until that happens, you dont have a choice. And like I said before, an offset without a cap is meaningless.
So I guess I misunderstood your point unless you really are arguing that we should ignore the cheapest reductions and go for the most expensive. If the system isn't getting the cheapest reductions first then we are wasting a lot of time and money. Furthermore, IMO, political reality will not allow for a lasting or meaningful carbon tax any time soon.