2014년 8월 5일 화요일

[발췌] carbon offsets and additionality

자료 1: http://www.co2offsetresearch.org/consumer/Additionality.html ( Carbon Offset Research & Education, Stockholm Environment Institute )

※ 발췌 (excerpts): 

Additionality

"Offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened."  (Dan Welch quoted in ^the Guardian^, June 16, 2007)

The topic of 'additionality' is the most fundamentalㅡand thus contentiousㅡissue in the carbon offset market. In theory, additionality answers a very simple question: 
  • Would the emissions reductions have occurred, holding all else constant, if the activity were not implemented as an offset project?
Or more simply:
  • Would the project have happened anyway? 
If the answer to that is yes, the project is ^not^ additional.

Additionality makes intuitive sense: If I buy carbon offsets, I make the implicit claim that I forgo reducing my own emissions (i.e. I still drive my car) but in exchange I pay someone to reduce their emission in my stead. If I "neutralize" the emissions I caused while driving my car by buying offsets from someone who would have reduced their emissions anyway, regardless of my payment, I have not eliminated any emissions, but rather have subsidised an activity that would have happened anyway. The following example illustrates this point. The example uses offsets used under a cap-and-trade regime but the same principles apply for the voluntary market.

Scenario A:

Company A, a power producer in the UK, operates under a cap-and-trade system, such as the EU-ETS. Company A currently produces more emissions than it holds allowances for. Becaue of the high price of allowances Company A decides that it is more cost-effective to implement energy-efficiency upgrades in its facilities than to buy additional allowances. The company replaces its gas turbines with new high-efficiency turbines. With this upgrades, Company A reduces its emissions enough that it does not need to buy allowances to meet its quota. The cap-and-trade system has achieved its goal of inducing emissions reductions through a binding cap.

Scenario B1:

Company A decides that instead of replacing its turbines, it would like to explore buying CER credits at lower cost. Company B in China, also a power producer, is not under a cap-and-trade system, but would like to replace its old turbines, provided the company can obtain financing and access to high efficiency turbine technology. Company A approaches Company B, offering to purchase CDM credits and to transfer technology and expertise. With the additional revenue from the sale of CDM credits to Company A and access to advanced technology, Company B can now undertake the turbine upgrades. This can be considered an additional project.

Scenario B2:

Company B in China has already determined that it will upgrade its turbines, and has sufficient financing and access to suitable technology. Company A offers to partner with Company B and present this project as a CDM project, creating CDM credits corresponding to the activity that was planned to be implemented anyway. In this case, the CDM project cannot be considered to lead to any additional reductions. If it were to be registered as a CDM project regardless, it would result in the creation of credits that allow Company A to emit more than it would have without the CDM project without having created any compensating reductions.

The calculation of the number of offsets generated by a project is inherently problematic. The key difficulty lies in the need to compare the projects' actual emissions to a counterfactual scenario reflecting another reality, one in which the activity is ^not^ implemented as an offset project. This scenario is referred to as the "baseline" scenario, and the number of generated credits is equal to the difference between emissions in the baseline scenario and emissions resulting from the project. There is no fail-safe way to divine what the baseline scenario would be. Various methodologies, protocols, and rules-of-thumb can be devised, but ultimately the scenario cannot be known with certainty.

( ... ... )

자료 2: What is Additionality? Part 1: A long standing problem (Michael Gillenwater, GHG Management Institute, Jan 2012)

※ 발췌 (excerpts):

6. A demonstration of imprecise language

The language used for describing and defining additionality and baselines in the literature and by GHG emission offset programs is, with few exceptions, imprecise, varied, and internally inconsisten, thereby leading to confusion when program administrators and other stakeholders attempt to interpret and apply the concept. This definitional ambiguity has caused problems for investors and the ability of programs, such as CDM, to achieve greater scale(IETA 2009). It has also exposed emission offset programs to criticism (Wara and Victor 2008) and claims that offset policies are inherently flawed because of additionality assessment issues (IR 2008; FOE 2009).

Typical examples of language used to define additionality and baselines include the following, which illustrates both diverity in terminology and a general lack of precision:
  • beyond "business-as-usual" (OECD/IEA 2000) [n.15]
[n.15] Business as usual(BAU) is ambiguous term because it implies current or historical conditions should be the baseline. This problem can be solved by viewing the concept of BAU as forward looking.
  • "without project scenario," "no action case," and "no-project scenario" (OECD/IEA 2000);
  • "would the project have happend anyway?" (CRS 2007; Wara and Victor 2008);
  • "the emissions that would have occurred without the project" (CRS 2007);
  • "what would have happend otherwise" or "what would have occurred otherwise" (OECD/IEA 2000; WB 2009);
  • emissions "in the absence of credits" (Bernow, Kartha et al. 2001); and
  • "emissions in the absence of an offset" (Bushnell 2010)[n.16]
Paulson (2009) provides a typical illustration of the type of language used to define additionality and baseline: "The baseline is a counterfactual scenario describing the amount of GHGs that would be emitted if the project was not implemented, that is, under business-as-usual circumstances."

A review of the climate change policy literature shows that the language used for describing and defining additionality and baseline is largely silent on the policy intervention recognized to cause an activity to be additional. It is not possible to define additionality without referring to the concept of a baseline. And it is not possible to define baseline without first defining the policy intervention(s) that differentiate it from the conditions under which activities are proposed. The literature often refers to baseline as what would have happened otherwise, but then fails to answer the question ^otherwise except for what?^

6.1 A brief history of additionality

The history of a concept matters, as it identifies the issues that have and have not been considered in the development of the concept as well as how and whether those issues were resolved. Offsetting id not originate within the concept of climate change policy. Offsets credits were actually one of the earliest forms of emissions trading (Tietenberg 2006). Specifically, one of the first applications of a tradable emission offset mechanism was under the 1977 Clean Air Act in the US (Hahn and Hester 1989; ELI 2002), which allowed a permitted facility to increase its emissions of a local air quality pollutant if it paid another company to reduce, by a greater amount, its emissions of the same pollutant at one or more of its facilities. Here, additionality and baselines were assessed relative to restrictive emissions permit standards. Since then, offsetting has also been used for various types of water pollution, biodiversity, and air pollution (King and Kuch 2003; Fischer 2005) and additionality has been applied in the evaluation of energy efficiency program performance, especially for electricity utility DSM programs (Vine and Sathaye 2000; Vine, Kats et al 2003).

At the international level, starting in the early 1990s, the Multilateral Fund of the Montreal Protocol and the Global Environment Facility (GEF) used an assessment process, analogous to additionality, to establish the incremental cost of a proposed activity, relative to a baseline. They would then fund only this incremental cost (Chomitz 1998; Suiyama and Michaelowa 2001; Asuka and Takeuchi 2004; Figueres and Streck 2008)[n.19]

Within the context of climate change policy, experience with assessing additionality began with the development and implementation of a pilot program started after the first Conference of Parties(COP-1) to the UNFCCC in 1995. This pilot program was referrd to as Activities Implemented Jointly (AIJ) and was a predecessor to Joint Implementation and CDM under the Kyoto Protocol (Rents 1998). AIJ's objective was to gain experience with methodologies and implementation of a global GHG emission offsetting mechanism, although it did not allow the actual creation or transfer of emission reduction credits. It was during the period immediately following the establishment of the UNFCCC at the 1992 Rio Earth Summit that debate on additionality and baseline began in earnest.

Because it was anticipated that the funding for AIJ projects would come from international aid sources, the focus of this debate was about the desire of developing countries for project funding not to be a renaming of existing international development assistance, GEF, or other UNFCCC funding (Rentz 1998).[n.20] Specifically, the Berlin Mandate at COP-1 defined additionality as "enviromental benefits related to the mitigation of climate change that would not have occurred in the absence of such activities", going on to state "the financing of activities implemented jointly shall be additional to the financial obligations of Parties included in Annex II to the Convention within the framework of the financial mechanisms as well as to current official development assistance (ODA) flows" [n.21]

Unfortunately, during the AIJ pilot in the 1990s ( ... ) only vague guidance was provided on how to assess the additionality of and baselines for project proposals, and the topic continued to be problematic for policy makers (Michaelowa 1998; Trexler and Kosloff 1998; Meyers 1999)[n.22] The Kyoto Protocol text outlining its CDM and JI mechanisms did little to build upon the Berlin Mandate language on additionality. The Kyoto Protocol refers to the additionality of CDM projects as "reductions in emissions that are additional to any that would occur in the absence of the certified project activity" [n.23] and to the additionality of JI projects as "a reduction in emissions by sources, or an enhancement of removals by sinks, that is additional to any that would otherwise occur." [n.24] There appears to be no technical reason for why the language on additionality in these two articles of the Kyoto Protocol differs.

It is important to highlight two critical omissions in the language of the Kyoto Protocol, as this language still governs today. First, the language defining additionality under CDM places enormous weight on the term "certified," yet provides no guidance on the requirements of the certification process with respect to additionality. Secondly, and more importantly, no guidance was provided on what program administrators should recognize as the policy intervention created by CDM and JI.

The Parties to the UNFCCC recognized that both CDM and JI required further elaboration prior to implementation, which was the focus of COP-7. However, negotiators at this meeting were unable to reach consensus on a more precise definition of additionality (Michaleowa 2009b). [n.25] This round of negotiations produced the Marrakesh Accords, which defined a project as additional "if anthropogenic emissions of GHGs by sources are reduced below those that would have occurrred in the absence of the registered CDM project activity"(UNFCCC 2001) [n.26] This language is little changed from the original Kyoto language and simply substitutes "registered" for "certified."

Recognizing the lack of guidance on additionality and baseline provided by the negotiation process, the newly constituted CDM Methodologies Panel (the Meth Panel) attempted to address the issue soon after it was constituted in 2002. In its first draft of the form used to submit CDM project proposals (i.e. the Project Design Document template) in 2002, the Meth Panel included language requesting that project proponents "provide affirmation that the project activity does not occur in the absence of the CDM" (Asuka and Takeuchi 2004), thereby defining the existence of the offset program as the recognized policy intervention for assessments of additionality.

Two months later, in response to stakeholder claims that it was neither necessary nor approrpriate for the Meth Panel to clarify the definition of additionality provided in negotiated decisions, a second draft for the project proposal form was circulated.[n.27] This second draft used the following language: "why the emission reductions would not occur in the absence of the proposed project activity, taking into account national and/or sectoral policies and circumstances" (Asuka and Takeuchi 2004). This second draft reverted to the earlier language, which left the recognised policy intervention unspecified. It mentioned the need to consider existing and future policies but did not clarify how these were to be treated with respect to predicting baselines. Were policies, existing or new, to be considered as part of the baseline or not?

At its eighth meeting in 2003, the Panel added parenthetical language to the project proposal form asking project proponents to explain "how and why this project is additional and therefore not the baseline scenario" (Asuka and Takeuchi 2004; Michaellowa 2009a). This new language provided some conceptual clarity by highlighting a key characteristic of additionality; that it is about distinguishing a proposed activity from a reference baseline. However, by continuing to not provide guidance on what factors define a baseline scenario (i.e. the absence of a recognized policy intervention) [n.28] The first CDM projects were then registered in 2004 after largely subjective and ^ad hoc^ assessments of additionality and baselines by independent validators. [n.29]

In practice, CDM administrators have implicitly interpreted the potential to earn revenue in the form of tradable offset credits as the recognized policy intervention for assessing additionality and baselines. However, for political and other reasons, language codifying this treatment has not been adopted. As a result the ^de facto^ CDM processes for assessing additionality (i.e. additionality tool) relies on several largely subjective tests (i.e. regulatory, investment, barrier, and common practice), [n.30] although increasing detailed guidance has been developed over time (CDM 2009; Haya 2009).

( ... ... ) In sum, the climate change policy community has debated the issue of additionality for over a decade. Nonetheless, there has been little discussion on the underlying theoretical and logical foundation of additionality and baselines [n.31]

6.2 Talking in circles

Beyond the lack of precision, the existing language on additionality and baselines exhibits another problem. It is based on circular definitions. This problem is exemplified by the definitions in the Kyoto Protocol, which identifies the "project" as the policy intervention that causes the implementation of the projet activity. Remeber that, by the definition used here, a proposed activity is additional if it is different that its baseline. [n.32] A baseline scenario is then the behavior that occurs when that policy intervention is absent, while holding all other factors constant. Therefore, ^the lexicon of the Kyoto Protocol and similar programs are examples of circular definitions because "the project" has been specified as both the cause and the effect for the assessment of additionality and baselines.^

A key source of confusion in many additionality debates is the failure to distinguish between two separate offset-related cause and effect relationships. Figure 1 illustrates this problem more clearly, since circular definitions can be stealthy. To explain: the correct "cause" for the assessment of additionality and the definition of a baseline is the policy intervention recognized by the government offset program. A classic example of policy intervention is an economic payment for some behavior, in the form of a government subsidy.[n.33] The "effect" of a change in behavior, assuming it occurs, is then the implementation of an ^additional^ activity. This cause and effet relationship is illustrated in the boxed question on the left in Figure 1. The fundamental question of additionality is whether the behavior of a given actor really did change as a result of a policy intervention or whether the intervention had no effect. If a proposed activity would be implemented even in the absence of the intervention then there is no change in behavior and the proposal is actually the baseline scenario.

Once a proposal is deemed additional, then the implemented activity (e.g. project) is the cause in a second relationship, with its effect being some measured performance improvement relative to the same baseline previously used in assessing the proposal's additionality. [n.34] This second cause and effect relationships is illustrated in the box question on the right in Figure 1ㅡit is often confused with additionality.


Definitions of additinality and baseline are hopelessly circular when they are founded on a question that asks whether a proposed activity caused itself to occur. Figure 2 outlines this circular aspect and contrasts it with language that references a policy intervention as the proper causal factor, and thereby avoids the trap of circularity.



As shown in Table 1, the major GHG emission offset standards and programs are built upon circular definitions of additionality and baseline. For the debate on additinality to advance, policy makers, researchers, and other stakeholders must take greater care with their language.

Table 1. Additionality and baseline definitions from select offset standards, programs, and references.

6.3 Additionality terms, tests and further definitional chaos

Adding to the confusion, an elaborate lexicon of additionality tpes has emerged in the climate change policy literature. Some of these terms are meant to explain or define additionality, while othes are intended to advocate for or against a particular approach to assessing additionality. In practice, they are often frame as tests that, by themselves, or in combination, should be used for assessing proposed activities.

Table 2 presents this range in terminology. The descriptions for each term presented in Table 2 are not intended to be exhaustive or definitive, as in most cases there is no precise or unambiguous definitions of the term available in the literature.

Stepping back, the profusion of types of additionality in the literature could be seen as a process of searching for policy consensus. However, no consensus has emerged and offset policy makers continue to lack a sound theoretical basis for applying the concepts of additionality and baselines. Offset policy would be better served by a single definition of additionality rather than a proliferation of types and tests, as a test is not meaningful without clarity on what is being tested for. Defitions of additionality and baseline, as proposed at the end of the article, would be a fist step in achieving consensus and resolving questions over additinality and baseline assessment techniques.

( .... .... )

댓글 쓰기