CARBON OFFSETS

Discussion presentation by Peter H

THE STEREOTYPE“Where are you flying to?”“New York”“That’s…1.8 tonnes CO2 equivalent”“Oh…”“But don’t worry, give us $7.50 and we’ll

arrange to plant enough trees to exactly mop up your flight emissions”

“Phew, thanks”“Sorted. Now where would you like to fly

next?”THIS IS THE ‘TINSEL STANDARD’

AND DESERVES TO BE SATIRISED BY WITTY SPOOF WEB SITES

HOW DID IT START?•Kyoto protocol•Emission reduction processes vary a lot in price•Makes sense to do the cheapest first •It doesn’t matter where•If it also contributes to economic development, win-win•Results in net resource transfers from rich to poor and promotes ‘leapfrogging’•Known as the Clean Development Mechanism, CDM•Credits are traded in a regulated international carbon-market as “Certified Emissions Reductions” or CERs, each worth a tonne of CO2e•Would probably be an essential component of ‘Contraction and Convergence’

THE VOLUNTARY OFFSET MARKET

•CERs are expensive, high transaction and verification costs (£12-25 typical)•Designed for Big Players trying to meet regulatory (treaty) obligations•“Voluntary Market” purchases emissions credits for purposes other than meeting regulatory targets•The retail market invests in reduction projects and sells small portions with a mark-up•The credits generated are called Verified Emissions Reductions or VERs•VERs are less carefully regulated than CERs and cost less £2-5 typical)

BASIC CRITIQUE•Does not result in net reduction•Can encourage emitting activities•Blunts incentives for low-carbon restructuring•Seems exploitative and unjust

•Seen as a way for the rich to consume without restraint– and with good conscience, the hypocritical bastards

•Gambles future reductions against emissions now•It is only temporary

–Eventually there will be no more offset projects

CRITICS PARTICULARLY HATE FORESTRY (LUCF) PROJECTS•Carbon sequestration in biomass is hard to assess accurately•Quality cannot be assured for 100+ years•It could be catastrophically reversed•Benefits take a long time to materialise•Possible negative effects on biodiversity and local communities

POSITIVE ARGUMENTS

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Present Pure'demand'approach

Pure'supply'

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Likely mix

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A curious argument• Carbon emissions are largely

proportional to expenditure (and therefore income)

• It is extremely difficult for rich people to live at a sustainable level

• The rebound effect makes it even more difficult

• So what are they to do? Even if they live frugally, they’ve still got loads to spend

• They have to be induced to spend it on low-carbon products and services rather than high-carbon ones

• In the absence of carbon taxes, the existence of a ready market in carbon-reduction measures should be welcomed

R.E. SCHEMES

• Ones you do yourself seem real, not offsets

• But big commercial ones are usually more efficient

• Are they offsets?• Does it make a difference if

you go through a carbon broker?

BDCR WIND TURBINE•I bought 500 shares•1/750th of the total or 1330kWh a year•27MWh over 20 years•Saves 12 tonnes CO2e•Cost is about £42 per tonne

–Similar to level estimated by Stern Review for UK as a whole

•Is this an offset?•Can I claim all the credits now?•Or should I wait and knock them off year by year?•Is it better than investing in ‘remote’ wind projects?

•Would it be easier just to buy and retire ROCs?

MORE PUZZLES

•Have I mis-spent my money?

HELP!

POST-MODERN SUSTAINABILITY PRE-MODERN SUSTAINABILITY

WOW!ISN’T THIS

FANTASTIC?

HERE WE GO!

HANG ON A MINUTE….

EVERYTHING’S COLLAPSING!

WE SEEM TO BE GOING

BACKWARDS

PERHAPS THIS IS NOT SO BAD AFTER ALL…

ST

UF

F

QUALITY OF LIFE

TOWARDS HIGHER STANDARDSCarbon Trust

•Three-stage process–Reduce direct emissions–Reduce indirect emissions–Buy high-quality offsets

• “VALID” mnemonic– Verification– Additionality– Leakage– Impermanence– Double Counting

CAN WE TIE THESE DOWN IN TERMS OF NUMBERS AND REGULATIONS?

THE ‘GOLD STANDARD’

1.    Does the project use renewable energy or energy efficiency technologies?2.    Does the project go above and beyond a “business as usual” scenario?3.    Does the project promote sustainable development?

• LUCF, Hydro >15MW, nuclear, EFWI are all excluded

WHAT CAT MIGHT THINK--on the basis of best available

evidence• That high-quality offsetting should be supported as an essential part of global decarbonisation•That current difficulties should be regarded as problems to be solved rather than fundamental flaws•That EFWI, large hydro and LUCF schemes should not be automatically excluded• That the gold (or perhaps ‘platinum’) standard should specify net negative emissions rather than simple balancing or neutrality•That LUCF in particular must be addressed in the overall context of climatye change, and solutions to its problems actively sought

WHY IS LUCF IMPORTANT?

• 20-25% emissions are due to deforestation• Preventing deforestation is important from other perspectives as well as climate change

– biodiversity– ecosystem services– local communities

•A flow of funds for such projects is essential•Trees and forests are so far the only net-negative processes we have

BIOLOGICAL CARBON SEQUESTRATION

+ More permanent uses for forest products

CARBON OFFSETS

THE END