Potential for International Offsets to Provide a Net Decrease of GHG Emissions

Potential for International Offsets to Provide a Net Decrease of GHG Emissions / M. Lazarus, P. Erickson and L. Schneider, with contributions from A. Kollmuss. Stockholm Environment Institute, September 2013, 26 p.  (SEI Working Paper No. 2013-06)

http://www.sei-international.org/mediamanager/documents/Publications/Climate/SEI-WP-2013-06-New-Market-Mechanisms.pdf

Authors’s abstract :

At COP 17 in Durban, the Parties called for new market mechanisms, and more broadly, “various approaches, including markets” to “achieve a net decrease and/or avoidance of greenhouse gas emissions”. This paper explores what a net decrease might mean in practice, how it might be achieved, and the potential scale of the net atmospheric benefit that could be attained in 2020. It finds that achieving a net decrease in global GHG emissions hinges on: a) the ability to generate offset units for which additionality is relatively certain; b) measures (such as shortened crediting periods or pre-issuance discounts) that lead to more GHG abatement than credited, i.e. surplus reductions; and c) a means to account for any surplus reduction in a way that it does not simply contribute to meeting an existing GHG reduction pledge. The paper also draws lessons from the Clean Development Mechanism about challenges in attaining a net decrease, and examines the potential for existing CDM project types to produce surplus credits. Within the CDM, we find industrial gas projects to be most promising for yielding a net decrease in global GHG emissions, potentially yielding a net decrease on the order of 100 million tonnes CO2e in 2020. However, there is declining interest among major offset buyers, the EU in particular, in using the CDM or other offset mechanisms for low-cost, industrial gas abatement. Lastly, this paper finds that for offsets to attain a net decrease in GHG emissions, Parties must also reach agreement on how to avoid double counting of emission reductions associated with offsets.

Danièle Revel

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