Memorandum submitted by the Carbon Trust
Thank you for this opportunity to contribute
to the Committee's inquiry into the voluntary carbon offset market.
As you will be aware, the Carbon Trust is an independent company
funded by Government and tasked with helping the UK move to a
low carbon economy. We do this by working with business and the
public sector to reduce carbon emissions, and by capturing the
commercial opportunities associated with developing low carbon
technologies.
The voluntary offset market has seen rapid growth
in the past two years, driven primarily by increasing public awareness
of climate change. This is a complex emerging market, which is
currently unregulated. We have developed a three stage process
to help business and public sector organisations that wish to
offset to do so robustly as part of an overall carbon management
strategy:
— firstly, focus on direct emissions,
reducing their in-house carbon footprint and creating bottom line
savings by implementing all cost effective energy efficiency measures.
Where cost effective, opportunities to reduce the carbon intensity
of energy supply by developing low-carbon energy sources such
as on-site generation should also be explored;
— secondly, look at reducing indirect
emissions, working with other organisations to reduce emissions
(and cut costs) up and down the supply chain, as well as looking
for opportunities to develop new low-carbon products and services;
and
— thirdly, if appropriate, consider
developing an offset strategy, ensuring that only high quality
offsets are purchased from verified projects that genuinely create
emissions reductions.
Reducing direct and indirect emissions before
considering offsetting makes financial sense and increases the
environmental integrity of an organisation's carbon management
strategy. Recent media interest has shown the reputational damage
that can result from an offset-only approach.
Finally, to help with the identification and
assessment of good quality offsets, the Carbon Trust recommends
that organisations assess offsets against five criteria that they
should comply with to provide a minimum level of quality assurance:
— verification—offsets should
always be verified by an accredited third party according to a
standard or protocol;
— additionality—ensure reductions
are additional to what would have happened in the absence of the
project;
— leakages—take into account
potential negative environmental impacts beyond the project boundary
(for example reforestation projects might have negative effects
by displacing agricultural activities to other areas where they
could generate emissions);
— impermanency—ensure the reductions
achieved are maintained over time (particularly critical for carbon
sink projects, for example forestry projects could re-release
the carbon captured in the growing trees if the forest burnt down
or the use of the land changed); and
— double counting—avoid offsets
being sold or counted more than once.
I have enclosed copies of our recent report,
"The Carbon Trust three stage approach to developing a robust
offsetting strategy", [not printed] which is a summary of
our work in this area and provides a contextual background to
the offsetting market and carbon neutrality.
We would be very happy to assist the Committee
in its inquiry in any way possible.
January 2007
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