Memorandum submitted by the Royal Society
for the Protection of Birds
SUMMARY
1. Although carbon offsetting is increasingly
popular, it is a highly contentious area of climate change mitigation
policy. Not only are there many types of offset of highly varying
quality but there is dispute over whether they are effective in
promoting the types of behavioural change needed to limit climate
change. The RSPB thus welcomes the recent Government initiative
to define criteria to bring greater clarity to the offset market
and we are generally supportive of the criteria proposed, ie to
recognise only internationally agreed credits.
2. We are, however, concerned that although
some offsets deliver social or biodiversity co-benefits together
with carbon savings, there is currently no way of recognising
these benefits. Clearly, it would not be possible to claim extra
carbon credit for projects that have more general sustainability
benefits but explicit identification of such benefits would be
advantageous in promoting projects that are environmentally benign
over ones that are adequate solely in carbon terms—but might
be damaging in terms of the broader environment. Currently, for
example, the forestry-related credits recognised by Kyoto do not
adequately discriminate between projects that have both carbon
and biodiversity value and those that may save carbon but could
harm wildlife, such as plantations of fast growing monocultures.
INTRODUCTION AND
BACKGROUND: SOME
PROS AND
CONS OF
OFFSETS
3. The RSPB is Europe's largest wildlife
charity with over one million members. We manage one of the largest
conservation estates in the UK with 196 nature reserves, covering
more than 131,000 hectares. The RSPB is part of the BirdLife International
partnership, a global alliance of independent national conservation
organisations working in more than 100 countries worldwide.
4. The role of offsets in mitigating climate
change is the most hotly disputed area of climate change policy,
giving rise to fierce, often acrimonious disputes amongst those
involved in the climate change debate. The RSPB's situation is
typical of many other environmental and nature conservation organisations.
On the one hand, many of our nature conservation activities, both
in the UK and abroad, either sequester carbon dioxide or prevent
the degradation of natural land, such as the felling of forests,
and thereby avoid the generation of emissions. We are thus in
a strong position to mitigate climate change by our conservation
activities and hence to generate carbon credits from them, the
proceeds of which could be used both for further mitigation and
for nature conservation.
5. On the other hand, we are concerned about
the use of project-based carbon credits as a tool for the mitigation
of climate change because of the effect that this might have on
behavioural change. Whilst it clearly does not matter to the atmosphere
where greenhouse gases are emitted or sequestered, it can matter
in policy terms and begs a number of questions. If, for example,
a core policy objective of an organisation such as the RSPB is
for individuals and nations to reduce emissions at home—because
this is ultimately the only solution to climate change—does
it make sense to allow them to continue to emit, or even increase
their personal emissions, and to purchase cheap offsets from abroad?
If an individual offsets their emissions, will they also try to
cut their own emissions, or lobby government to legislate for
emission cuts? Is offsetting a cheap and easy way of salving the
conscience of rich people and rich countries, but not an option
for then poor?
6. Concerns about the use of offsets, both
voluntary and officially sanctioned, also arise in national and
international policy-making. For example, both the Kyoto Protocol
cap and trade scheme and the EU Emissions Trading Scheme (EU ETS)
allow the use of Certified Emission Reductions (CERs) from projects
conducted under Kyoto's Clean Development Mechanism (CDM). Yet
if the EU ETS is intended to reduce emissions in the EU, which
was clearly the intention when it was conceived, then should it
include emission reductions from outside the EU, from countries
that have no international emission limitation commitments? Allowing
project-based credits from uncapped countries into the EU ETS
not only has the effect of inflating the EU cap—making the
already weak targets even weaker—but it has implications
for the development of the post-2012 climate regime. Under Kyoto
and the Climate Convention, developed countries are obliged to
take the lead in reducing emissions, and developing countries
are only likely to take on commitments when the developed countries
have manifestly reduced their own emissions. But, if the developed
countries have reduced their emissions largely, or even partly,
by buying emissions reductions from developing countries, it is
debatable whether this constitutes "taking a lead".
7. Conversely, proponents of Kyoto-approved
credits argue that CDM projects help developing countries on the
path to sustainable development by providing much needed funding
for low carbon projects that would not take place otherwise. Whilst
most of the projects are in the most developed countries (respectively,
India, Brazil, Mexico and China) rather than the most needy countries
they are, on the other hand, being conducted where emission reductions
are most needed. This is in contrast to many "voluntary"
projects which are often driven by social or environmental factors
other than climate change and are conducted in countries that
emit very little—and arguably need to take no action.
8. It is noteworthy that the volume of credits
in the official and voluntary markets is on a quite different
scale. Whilst voluntary markets are said to be booming, they are
dwarfed by the officially sanctioned market where more than 26
million CERs have already been issued, 710 million will arise
from existing projects and more 1.5 billion are expected to be
issued by the end of 2012. In our opinion, this trend for the
official market to dominate the voluntary one is likely to continue,
if only because the officially recognised credits have a realisable
value, as is outlined below
9. Prices and costs are markedly different
for voluntary and official offsets and the differences are likely
to become more marked when the Kyoto market starts full-scale
operation in 2008 and the value of CDM and Joint Implementation
(JI) credits is likely to rise. This price differential arises
because official credits are required by developed countries to
comply with legally binding emission reduction targets under Kyoto
and thus have a value linked to the cost of meeting those targets—not
simply the cost of the projects. The projects also have to bear
costs associated with formal validation and approval processes.
The sole purpose of a voluntary offset, however, is to provide
a lowest cost emission reduction, often with minimal accreditation
costs, and so their sale price is always likely to be lower. (It
can be argued that all offsets should be priced so as to reflect
the damage costs of climate change, rather than being as cheap
as possible, but this seems unlikely because it would significantly
raise the price of offsets. DEFRA's recommended social cost of
carbon (damage cost) is £70/tonne carbon but other estimates
range as high as £1,000 tonne C.)
10. On balance, the RSPB considers that
only those offsets approved by the agreed international system,
the Kyoto Protocol, should be employed in "voluntary"
markets. These obey rules which were agreed by experts from nearly
all countries in the World and, although they are deficient in
some respects, they are the best that there are. To use other
credits, obeying other sets of rules, if any, would seem perverse.
11. We recognise, however, that there are
certain types of emission saving activity that are not, at present,
recognised by the international system—notably emissions
avoided by not felling tropical forests (so-called avoided or
reduced deforestation) but also emissions from other land-use
change, such as peat extraction. Halting activities such as deforestation
not only has huge value in terms of combating climate change (20%
of global emissions arise from tropical deforestation) but has
a similarly large value in terms of conserving biodiversity and
protecting indigenous people. We consider that recognising such
co-benefits is imperative and we will therefore strive to bring
such activities within the remit of the international climate
regime and participate in pilot projects in order to gain greater
knowledge of the subjects.
In the remainder of this response, we answer
the questions posed by the Committee in the order that they were
set in the call for evidence.
Ought there to be a compulsory UK or European
accreditation scheme for carbon offset projects or companies?
If so, how should this operate?
12. Yes. It should be the same as that agreed
under Kyoto, allowing only those projects approved by Kyoto, ie
Certified Emission Reductions (CERs) from the Clean Development
Mechanism (CDM) and Emission Reduction Units (ERUs) from Joint
Implementation (JI) projects in developed countries.
13. There are already mechanisms in place
for the approval of projects under Kyoto; in the case of CDM credits
approval is by the CDM's Executive Board.
14. As avoided deforestation and other land
use change activities are included in Kyoto, they too should be
included eligible for accreditation under any UK or EU scheme.
Should offsetting become mandatory for some of
the more carbon-intensive activities, such as flying?
15. No. The way to reduce emissions from
aviation is to do just that, by managing demand and, making aircraft
more efficient in terms of their greenhouse gas emissions.
16. The key to reducing emissions nationally
and internationally is by means of constantly diminishing carbon
budgets covering all emissions, linked, where possible, to trading
schemes that allow personal or institutional choice over which
emissions to cut, as long as overall emissions where reduced.
Aviation emissions might then continue to increase, within limits,
so long as commensurate cuts where made elsewhere within the capped
system. A draft amendment to the EU ETS, issued by the Commission
in December 2006, aims at this type of solution. Aviation emissions
would be opted into the EU ETS, covering about 50% of all EU carbon
dioxide emissions. Emissions from large combustion plant and aviation
would then be capped but emission allowances could be traded,
allowing aviation emissions to rise if aircraft operators purchased
allowances from the operators of large combustion plant that had
cut emissions by more than their target. In principle, we welcome
this type of approach although we have reservations about the
details of the Commission's proposal. (The key test of the effectiveness
of any cap and trade scheme is that it will cut emissions in line
with national and international targets yet, as it stands, the
Commission proposal does not ensure that this occurs.)
17. Offsetting aviation emissions, or emissions
from other sources, with credits from uncapped nations does not,
ultimately, solve the problem of rising emissions in capped countries
like the UK. Emissions in most developing countries, especially
the rapidly industrialising ones continue to rise apace and unchecked.
A few offset projects, even if they amount to many millions of
tonnes of carbon will do almost nothing to slow this rise. If
we are to tackle the problem of climate change much more stringent
action is needed, perhaps in the form of commitments to limit
the rate of increase of emissions in some sectors in the most
rapidly industrialising developing countries.
Is there enough clarity within the offset market
to allow customers to make informed choices based upon robust
information about different schemes at different prices?
18. No. We have had an interest in this
area for about decade yet we would find it very hard to make a
fully informed choice. For the non-expert it is a minefield, with
some excellent credits delivering climate change, biodiversity
and social co-benefits and others delivering little or no benefits.
There are no reliable, unbiased sources of information on the
subject.
Many offset projects involve afforestation or
reforestation. Is the science sufficiently coherent in this area
accurately to assess overall long-term carbon (or other GHG) gains
and losses from such projects?
19. Whilst there is considerable uncertainty
in estimates of the take up of carbon dioxide by forests and other
land use change, this is not necessarily a severe problem as long
as conservative estimates are used when claiming credit for carbon
stored. This is a standard means of addressing uncertainty.
20. A more intractable problem is the fact
that all biological sinks for carbon can reverse. That is, they
can release the carbon that they have stored. Carbon sequestration
projects are fundamentally dissimilar to emission avoidance projects,
such as those involving energy. Once emissions are avoided, for
example by replacing a diesel generating set with a hydroelectric
one, then they are avoided forever, the emissions never reach
the atmosphere and never cause any damage. Forests typically store
carbon from the atmosphere but if it is later released then the
initial storage is negated; the atmosphere is harmed as much as
it would have been in the first place. To be effective as a mitigation
measure, sequestration projects thus need to ensure that carbon
is stored forever.
21. However, forest fires, pests and climate
change can all cause forests to change from net sinks for carbon
to net sources and it is obviously impossible to forestall all
such occurrences indefinitely. The Kyoto Protocol's Clean Development
Mechanism (CDM) circumvents this difficulty by introducing the
concept of a temporary Certified Emission Reductions (tCER) which
expires after five years but can be renewed it is demonstrated
that the forest remains unchanged. This "solution" works
in accountancy terms but does not repair any damage done to the
atmosphere if a carbon sink reverses.
Is there sufficient data available to guarantee
accurate amounts of carbon or other GHG mitigation in the sorts
of schemes which offset projects finance?
22. The voluntary market varies enormously
with some offsets being rigorously scrutinised and others not,
according to widely varying sets of voluntary rules.
23. In the CDM there are suitable provisions,
except if a sequestration project reverses. CDM project developers
have to prepare detailed plans and methodologies that are scrutinised
by the CDM Executive Board of independent experts, and projects
are regularly verified. All estimates of carbon saved are conservative
so that, if anything, the emission savings are underestimated.
Project details and CDM Executive Board proceedings are published,
and Board meetings can be viewed live on the web.
What impact will the voluntary carbon offset market
have on the compliance market if the former continues to grow
as steadily as it has done over the last few years?
24. Very little or perhaps none. The market
in compliance-related project credits will be increasingly driven
by the need to generate credits that can be used to demonstrate
compliance in the 2008-12 period of both the Kyoto Protocol and
EU ETS, for which voluntary credits are useless.
25. The market in voluntary credits is driven
by individuals and institutions that wish to green their lifestyles
or modes of operations and, in the case of institutions, to publicly
demonstrate that they are doing so. However, because of ongoing
disputes about the value of voluntary credits, companies are increasingly
using compliance credits (CERs) to protect their reputations and,
because the corporate sector is potentially so valuable to them,
offset companies are tending to do the same.
26. In the longer term, we consider that
the market for voluntary credits will decline, being substituted
largely by official compliance credits—largely to avoid
reputational risk. This decline is likely to be accelerated by
the UK Government proposals for an accreditation scheme that only
recognises compliance-related credits (CERs, ERUs and EU ETS allowances).
What evidence is there to show that offsetting
helps to change the carbon behaviour of the customer?
27. We are unaware of any definitive evidence.
Individuals that employ offsets tend to be environmentally aware
and keen to do something to mitigate their unsustainable lifestyles,
especially flying. They are probably not, therefore, representative
of society as a whole and it is hard to say whether they would
alter their carbon behaviour anyway, because they are "green",
or because they choose to offset.
28. There is a concern that using offsets
will tend to prevent individuals, or institutions, from taking
practical action themselves because, if offsetting is truly effective,
why should they alter their behaviour or encourage others to do
so? If, for example, a company offsets the emissions from flights
taken by its staff, would it also cut back on flying and lobby
government to reduce demand for aviation? We think not.
To what extent are the schemes and projects funded
by offset companies more broadly sustainable, in an environmental,
social or economic sense?
29. Many projects in the voluntary market
are specifically designed to be more broadly sustainable, certainly
in the sense of being more generally environmentally friendly
and more socially just. Indeed, voluntary offset projects were
originally conceived as forest conservation projects or schemes
to assist poor people in developing countries and also happen
to save carbon.
30. Whilst projects that deliver multiple
benefits are clearly highly desirable, it can be hard to marry
the different benefits effectively. For example, one of the longest
and most acrimonious debates in the detailed negotiations on the
Kyoto forestry provisions was around the climate and biodiversity
benefits that might accrue from afforestation and reforestation
projects. On one hand, there was a desire to support projects
that would lead to the regrowth of natural forests in developing
countries, with considerable benefits for biodiversity and indigenous
people but sequestering carbon at a low rate. On the other hand,
there was a desire to maximise carbon sequestration rates, which
would be best achieved by fast-growing monoculture plantations,
delivering considerable carbon benefit but with potentially disastrous
effects on biodiversity and indigenous people.
31. In the end, it was not possible to find
a way of excluding monoculture plantations and encouraging the
greater environmental and social good—because the Kyoto
Protocol basically deals in carbon saving and not with more general
sustainability as well. There are thus likely to be more bad than
good forestry projects, in general environmental and social terms,
in spite of the best intentions of many negotiators. This situation
clearly needs to be rectified. Any accreditation scheme should
identify and support projects that bring biodiversity or social
co-benefits whilst ruling out those that have adverse effects
upon sustainable development. It might, for example, be appropriate
for international agreements such as the Convention on Biological
Diversity (CBD) to provide biodiversity criteria for land use
change-related projects conducted under the Kyoto Protocol.
January 2007
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