Emissions Trading & Offsets

Emissions Trading & Offsets at SEI-US
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		Can Concerns with CDM Coal Power Projects be Addressed through Revisions to the ACM0013 Methodology? SEI policy note Author(s): Lazarus, M. ; Chandler, C. Date: December 2011 Research Area(s): Emissions Trading & Offsets This policy note briefly assesses the ability of potential revisions to address key concerns with the CDM methodology used to evaluate CDM coal power projects, ACM0013, and with such projects in general. It is a follow-up to SEI Working Paper 2011-02, which examined several concerns with awarding offset credits (CERs) to coal power projects under the Clean Development Mechanism. The note reviews key concerns with CDM coal power projects, lists potential remedies for each concern, and comments on whether these remedies are likely to prove feasible and adequate. The authors identify three problems with no clear possible solution: a low signal-to-noise ratio; the ineffectiveness of additionality assessment in the context of multi-billion-dollar coal power projects; and the contradiction of using climate finance in support of long-lived emissions-intensive infrastructure that could undermine the ability to meet 2°C climate stabilization objectives. More information Download PDF
		Coal Power in the CDM: Issues and Options SEI Working Paper No. 2011-02 Author(s): Lazarus, M. ; Chandler, C. Date: November 2011 Research Area(s): Emissions Trading & Offsets This paper examines several issues that arise in awarding emission reduction credits to coal projects in the Clean Development Mechanism (CDM). It identifies systematic weaknesses in the coal methodology's (ACM0013) design and application. The authors estimate that shortcomings lead to significant over-crediting of Certified Emission Reductions and discuss why a revision of the methodology to more accurately estimate emissions reductions may not be possible because of data constraints and weak signal-to-noise ratio. The paper also examines evidence that suggests the vast majority of these projects would have proceeded in the absence of the CDM, and are thus non-additional. It considers the suitability of coal in the CDM, given the identified flaws in the methodology, and in the light of coal's impact on climate change and its social and environmental burdens. Download the executive summary, or click below for the full report. More information Download PDF
		Importance of programme design for potential U.S. domestic GHG offset supply and quality Climate Policy, published online Author(s): Erickson, P. ; Lazarus, M. ; Kelly, A. Date: July 2011 Research Area(s): Emissions Trading & Offsets Greenhouse gas (GHG) offsets are a central feature of most regional and national cap-and-trade systems. This analysis considers how the design of GHG offset protocols for the United States – and the corresponding rules for eligibility, measuring, verifying and awarding offsets – might impact actual offset crediting and the realization of GHG mitigation potential. Findings indicate that although lenient offset rules and protocols may bring several times more credits to market than a conservative approach, they could also undermine the cap-and-trade system's effectiveness at reducing overall GHG emissions. In particular, lenient rules and protocols could conceivably lead U.S. emissions to exceed legislative targets by as much as 500 million tons CO₂e in 2020. More information External Link
		The Implications of International Greenhouse Gas Offsets on Global Climate Mitigation SEI Working Paper WP-US-1106 Author(s): Erickson, P. ; Lazarus, M. ; Larsen, J. Date: March 2011 Research Area(s): Emissions Trading & Offsets International greenhouse gas offset credits from developing countries could play a major role in fulfilling developed countries' emission reduction pledges under the Cancun Agreements, but there is great uncertainty about the future role of such offsets. This paper focuses on a key question: whether both the developing countries generating the offsets and the developed countries buying them will be allowed to count the same emission reductions toward their respective pledges. The authors quantify the implications of double-counting of international offsets by building a spreadsheet model to analyze how potential offset supply and demand balances may evolve. They find that double-counting could effectively reduce the ambition of current pledges by up to 1.6 billion tons CO₂e in 2020. They close by describing several possible ways to address the risks of offset double-counting. Download PDF
		The Implications of International Greenhouse Gas Offsets on Global Climate Mitigation SEI Policy Brief Author(s): Erickson, P. ; Lazarus, M. Date: March 2011 Research Area(s): Emissions Trading & Offsets This policy brief, based on SEI Working Paper WP-US-1106, The Implications of International Greenhouse Gas Offsets on Global Climate Mitigation, provides a summary of the paper's analysis of the potential impact of counting offsets toward the emission reduction pledges of both the developing countries that generate them, and the developed countries that buy them. Download PDF