Why? Because Offsets Are Important!
Author | Laura H. Kosloff |
Position | Senior Counsel for EcoSecurities Group plc., consults on climate, energy, and environmental policy issues |
Pages | 50-51 |
Page 50 ❧ THE ENVIRONMENTAL FORUM Copyright © 2010, Environmental Law Institute®, Washington, D.C. www.eli.org.
Reprinted by permission from The Environmental Forum®, May/June 2010
Th e fo r u m
these three functions. And while
some programs, including the Clean
Development Mechanism under the
Kyoto Protocol, have come in for
criticism recently, most are uphold-
ing reasonable standards for offset
quality when viewed objectively.
With any carbon offset program
there will always be lurking ques-
tions: Would particular projects
that receive credit have been imple-
mented anyway? What level of
emissions would have occurred over
time in the absence of specific proj-
ects? ese are questions that can
never be answered definitively. For
offsets to be valuable and effective
at achieving overall emissions reduc-
tion goals, however, absolute cer-
tainty is unnecessary. e Climate
Action Reserve and other carbon
offset programs have developed tools
to answer these kinds of questions
credibly, analytically, and robustly
while recognizing the inherent un-
certainty.
It is a hard fact that the most
cost-effective near-term options for
reducing global GHG emissions
are likely to come from sources that
will not be covered by regulatory
emissions caps. Carbon offsets allow
trading systems to take advantage of
these options, creating flexibility, li-
quidity, and the ability to go further,
faster in reducing overall emissions.
e problem is not that we do not
know how to set effective standards.
Rather, the challenge is for policy-
makers to clearly and transparently
explain the need for offsets, to con-
front the uncertainties and tradeoffs
involved, and to adopt rules accord-
ingly. It is only by demonstrating
this kind of leadership that we will
achieve the very significant reduc-
tions in global emissions that are
necessary to address the urgent chal-
lenge of climate change.
Derik Broekhoff is Vice President for
Policy at the Climate Action Reserve.
Why? Because
Offsets Are
Important!
L H. K
O
ffsets make economic
sense for emitters seek-
ing to limit compliance
costs, particularly in the
near-term when they
could lead to stranded investments.
ose emitters have been seen as
key to politically acceptable climate
change policy, which is why offsets
have grabbed such a high profile.
A well-designed offset can be
characterized as a win-win. e po-
tential for advantage is particularly
true at the global level, where offset
funding could provide revenues for
energy and natural resource pro-
grams in developing countries, sup-
plementing dwindling international
assistance.
is has become lost in some
recent debates — offsets really can
make sense economically and envi-
ronmentally. Facts:
• e atmosphere doesn’t care
where emissions or reductions occur.
GHGs are the perfect tradable com-
modity.
• Since we do not have to worry
about pollution hot spots with
GHGs, there is no need for health-
based trading restrictions.
• e cost of achieving emissions
reductions varies by gas and region,
which increases the potential value
of market mechanisms in reducing
the cost of achieving targets. Reduc-
ing emissions at power plant smoke-
stacks is often far more expensive
than reducing methane emissions
from landfills. We should not aban-
don technological solutions, but it
in the interim we need to push cost-
effective approaches.
What kind of numbers are
involved? $10–20 billion could
mitigate a gigaton of CO2 emis-
sions annually through international
Offsets Allow Us
to Go Further,
Faster
D B
Carbon offsets have been a
central element of nearly
every market-based
program for controlling
greenhouse gas emis-
sions proposed or implemented
around the world over the past 20
years. It is easy to understand why.
Offsets help lower the cost of achiev-
ing GHG emissions reductions,
channel investment and resources to
countries (or sectors of the domes-
tic economy) that would otherwise
face no incentive to reduce emis-
sions, and, as a consequence, build
political constituencies in favor of
more comprehensive and aggressive
emissions targets. Yet despite their
embrace by policymakers, carbon
offsets have been greeted with skep-
ticism by many critics of emissions
trading.
On one level, this skepticism is
understandable. Carbon offsets are
the epitome of an intangible com-
modity. eir value and effectiveness
depend entirely on how they are
defined, quantified, and guaranteed.
Such guarantees require the estab-
lishment of standards and a regula-
tory infrastructure to consistently
enforce those standards. What many
critics of offsets overlook is how
robust these standards and infra-
structure are today, based on years
of work under both regulatory and
voluntary carbon offset programs.
Programs like the Climate Action
Reserve, for example, have helped
set a high bar for the voluntary car-
bon offset market, developing stan-
dards through public engagement,
overseeing verification activities, and
maintaining a publicly accessible
registry of offset projects. Nearly
all offsets openly traded today are
certified by programs that perform
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