Memorandum submitted by Energy for Sustainable
Development (ESD) and the Edinburgh Centre for Carbon Management
(ECCM)
Ought there to be a compulsory UK or European
accreditation scheme for carbon offset projects or companies?
If so, how should this operate?
No: ESD believes that transparency, not prescription
should be the key to shaping effective voluntary offsetting and
other voluntary actions. We are concerned about potential confusion
and negative consequences that might arise from combining initiatives
for voluntary action with regulated emission markets.
(1) DEFRA's proposed linking of voluntary
and regulated carbon offset markets will create confusion leading
to weaker regulatory frameworks. The government's main role in
carbon markets should be the strict allocation of compliance instruments
to regulated entities. If the government also uses public funds
to buy back GHG instruments for offset purposes, and if it expects
business and the public to tighten the market through their own
offsetting initiatives there is a danger that this will lead to
calls by business for greater allocations. There is also the question
of whether it is a good use of public money to purchase GHG instruments
that have been allocated to regulated businesses.
(2) The potential for negative impact on
existing standards currently under development.There are already
several NGOs and industry groups working on schemes for international
harmonisation and standards for voluntary sector projects. These
initiatives should be encouraged, and one or more could be endorsed
by the government, but there is no need for an additional standard
to be added to the numerous ones already under development.
(3) The potential for hindering innovation
and development in voluntary and regulatory standards for carbon
projects. Currently the voluntary markets are providing projects
for a number of different types of consumers, and are being developed
to work slightly differently in different regions / parts of the
world. This has encouraged diversity of approaches that can act
as a testing and/or training ground for future regulatory models.
It would be a waste to stifle this diversity and innovation by
turning the voluntary market into a regulatory one.
(4) The probable outcome will be to reduce
support for offset projects that have high poverty reduction benefits
or other sustainable development benefits. These types of projects
are generally more difficult to verify and assess in a precise
way, but are eminently suitable for voluntary public and corporate
support, so long as customers are aware of the risks and uncertainties.
(5) There is little clarity on what the UK
government or the EU's mandate is to intervene in on voluntary
actions. The government does not vet the effectiveness of aid
donations, medical charities, or ethical investments—so
it is unclear as to why they would see the need to intervene here.
Would these governments not be better placed to use any additional
resources to regulate sectors that are better served through government
action? Examples include: aviation, public transport, energy efficiency
in building/appliances etc.
Should offsetting become mandatory for some of
the more carbon-intensive activities, such as flying?
If offsetting is mandatory it is no longer voluntary—it
becomes a regulation or tax on activities such as flying. In this
case it would be sensible to apply regulated emission certificates
and include this as a formal part of the EUETS.
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?
The clarity and accuracy of information provided
to the public about carbon offset schemes is highly variable.
We recommend the development of more standard classification of
different types of offset offerings and better provision of supporting
information.
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?
Current science can provide approximate estimates
(20%) of the long-term carbon benefits from forestry and other
land use activities (IPCC). However, individual projects cannot
guarantee long-term performance. As long as purchasers or investors
in forestry activities are aware of the margins of error and the
risks associated with long-term delivery they should be free to
support such activities. Some offset providers provide insurance
or replacement guarantees that provide additional levels of assurance.
Is there sufficient data available to guarantee
accurate amounts of carbon or other GHG mitigation in the sorts
of schemes which offset projects finance?
Firstly it is important to determine what the
goals of voluntary offsetting are, and then determine which level
of information about a project is required. One reason why carbon
offsetting excites so much debate is that offsetting means different
things to different people and organisations. Here are three alternative
definitions:
"Cancelling or neutralising my emissions"
— Implies an expectation that the act
of offsetting fully cancels out GHG emissions associated with
my actions.
— Implies that responsibility or guilt
related to personal environmental impacts that may be resolved
or absolved through compensatory action.
— May be interpreted as "I no
longer need to worry about my emissions because I have offset
them".
"Doing something to compensate for the
effect of my emissions"
— Implies offsetting action may be
approximate or partial in its effect
— Implies acceptance that my actions
have an effect and that by supporting actions to reduce emissions,
I am doing something positive about it.
— Does not suggest absolution from
guilt or responsibility.
"Helping or co-operating with others to
reduce emissions"
— Simply an extension of my personal
efforts to reduce emissions.
— Implies that whether or not I reduce
my own emissions, I can do some good by helping others to reduce
emissions.
— Do not expect offset action to absolve
any guilt or responsibility.
There are very few offset projects that can
provide an absolute guarantee of carbon mitigation benefits. Those
that are able to provide a strong guarantee are often less "additional"—less
in need of financial support to achieve those benefits.
However, if a customer's aim is to achieve an
approximate compensation or simply to co-operate with international
efforts to reduce GHG emissions there may not be a need to provide
an absolute guarantee. Analogies include:
— Pension schemes or share investments
do not generally guarantee a certain level of return.
— Poverty reduction or environmental
charities do not guarantee specific levels of social and environmental
benefit.
In our view the customer should be provided
with information of sufficient quality to be able to determine
what it is they are supporting and how likely the activity is
to succeed.
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?
The voluntary market if allowed to grow organically,
and not regulated as is proposed above, will play two important
roles in enhancing and complementing the compliance market:
(1) As outlined under the first question,
voluntary markets can play a critical role in acting as a testing
and/or training ground for future potential regulatory models/systems.
(2) The voluntary markets will play a critical
role in engaging and educating individuals, and allowing them
to participate in carbon markets. Governments at the federal or
regional level are probably least suited to provide mechanisms
for individuals to reduce their carbon footprints, and so voluntary
markets play—and will continue to play—an invaluable
role in this space.
What evidence is there to show that offsetting
helps to change the carbon behaviour of the customer?
It should be recognised that the voluntary carbon
market is very young and still very small (the UK voluntary carbon
market is estimated at about £20 million per year.
There is little publicly available information
on consumer understanding of climate change and the importance
of carbon mitigation, but what proprietary research has been done
shows that there is a great deal of confusion in the US and UK
on both issues. One study by Halifax Travel Insurance showed that
10% of Britons would consider making a financial donation to offset
their travel carbon emissions, and that the same percentage were
prepared to fly less to reduce the impact on the environment.
Those who are willing to change their carbon behavior MAY be the
same as those who are purchasing offsets—but in order to
get a clearer picture of public awareness and willingness to make
behavior changes—further publicly funded research in this
area would be invaluable.
In terms of corporates, one would assume that
it would make business sense (in terms of cost savings) to first
address and reduce the internal carbon footprint prior to embarking
on an overall carbon neutral/carbon offset strategy, and in the
UK the majority of companies that are looking to offset some of
their carbon emissions have also taken steps to identify, monitor,
and mitigate their overall carbon footprint. However, more study
into corporate behavior in this area would also be useful, and
this type of publicly available research would be very valuable
to the market.
To what extent are the schemes and projects funded
by offset companies more broadly sustainable, in an environmental,
social or economic sense?
There is a great deal of variation. Some offset
companies are providing projects that are virtually identical
to compliance CDM or JI projects, but in countries or situations
where formal compliance is not possible. Some companies are providing
projects that have very strong poverty reduction or local environmental
benefits with less accurate or less certain GHG benefits.
January 2007
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