Emissions Trading & Offsets

Emissions Trading & Offsets at SEI-US
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Ensuring the environmental integrity of market mechanisms under the Paris Agreement

SEI policy brief

Author(s): Schneider, L. ; Kollmuss, A. ; La Hoz Theuer, S.
Date: October 2016

Research Area(s): Emissions Trading & Offsets

Market mechanisms that enable the international transfer of greenhouse gas emission permits or emission reduction credits have been part of the international climate regime for two decades. They aim to reduce the cost of achieving mitigation goals by providing flexibility in how and where emissions are reduced. This policy brief identifies key issues and explores options for safeguarding the environmental integrity of market mechanisms under the Paris Agreement, drawing on lessons from mechanisms established under the Kyoto Protocol.
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Supply and sustainability of carbon offsets and alternative fuels for international aviation

SEI Working Paper No. 2016-03

Author(s): Bailis, R. ; Broekhoff, D. ; Lee, C.M.
Date: June 2016

Research Area(s): Emissions Trading & Offsets

This paper examines the potential supply of carbon offsets and jet fuel alternatives available to help meet the international aviation sector’s emission reduction needs in 2020–2035. The analysis shows that ICAO can apply high environmental and sustainable-development standards to both carbon offsets and alternative fuels without compromising its 2020 "carbon neutral" goal.


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Has Joint Implementation reduced GHG emissions? Lessons learned for the design of carbon market mechanisms

SEI Working Paper No. 2015-07

Author(s): Kollmuss, A. ; Schneider, L. ; Zhezherin, V.
Date: August 2015

Research Area(s): Emissions Trading & Offsets

This study systematically evaluates the environmental integrity of Joint Implementation (JI) in the first commitment period of the Kyoto Protocol. The analysis indicates that about three-quarters of JI offsets are unlikely to represent additional emissions reductions. This suggests that the use of JI offsets may have enabled global GHG emissions to be about 600 million tonnes of carbon dioxide equivalent higher than they would have been if countries had met their emissions domestically.
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Has Joint Implementation reduced GHG emissions? Lessons learned for the design of carbon market mechanisms (brief)

SEI policy brief

Author(s): Kollmuss, A. ; Schneider, L. ; Zhezherin, V.
Date: August 2015

Research Area(s): Emissions Trading & Offsets

This policy brief summarizes a systematic evaluation of the environmental integrity of Joint Implementation in the first commitment period of the Kyoto Protocol, 2008-2012. As of March 2015, almost 872 million Emission Reduction Units (ERUs) had been issued under JI. Host countries must cancel one of their emission allowances for every ERU issued, but more than 95% of ERUs were issued by countries with significant surpluses of allowances in the first commitment period of the Kyoto Protocol. Of the six largest project types, only one – N2O abatement from nitric acid production – had overall high environmental integrity; for the rest, additionality seems unlikely or questionable, or unrealistic assumptions were used that significantly overestimate emission reductions. Overall, 80% of ERUs issued came from project types with questionable or low environmental integrity.
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Perverse effects of carbon markets on HFC-23 and SF6 abatement projects in Russia

Nature Climate Change, online 24 August 2015

Author(s): Schneider, L. ; Kollmuss, A.
Date: August 2015

Research Area(s): Emissions Trading & Offsets

This article examines how the ability to generate additional Joint Implementation credits may have affected waste gas generation at chemical plants in Russia. The environmental integrity of project-based mechanisms has been subject to controversial debate and extensive research, in particular for projects abating industrial waste gases with a high global warming potential. For such projects, revenues from credits can significantly exceed abatement costs, creating perverse incentives to increase production or waste gas generation, to increase credit revenues from waste gas abatement. Here the authors show that all projects abating HFC-23 and SF6 under the Kyoto Protocol's Joint Implementation mechanism in Russia increased waste gas generation to unprecedented levels, once they could generate credits from producing more waste gas.
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