Evaluating Carbon Offsets from Forestry and Energy Projects : How Do They Compare?

Under the Kyoto Protocol, industrial
countries accept caps on their emissions of greenhouse
gases. They are permitted to acquire offsetting emissions
reductions from developing countries - which do not have
emissions limitations - to assist in complying with these
caps. Because these emissions reductions are defined against
a hypothetical baseline, practical issues arise in ensuring
that the reductions are genuine. Forestry-related emissions
reduction projects are often thought to present greater
difficulties in measurement and implementation, than
energy-related emissions reduction projects. The author
discusses how project characteristics affect the process for
determining compliance with each of the criteria for
qualifying. Those criteria are: 1) Additionality. Would
these emissions reductions not have taken place without the
project? 2) Baseline and systems boundaries (leakage). What
would business-as-usual emissions have been without the
project? And in this comparison, how broad should spatial,
and temporal system boundaries be? 3) Measurement (or
sequestration). How accurately can we measure actual
with-project emissions levels? 4) Duration or permanence.
Will the project have an enduring mitigating effect? 5)
Local impact. Will the project benefit its neighbors? For
all the criteria except permanence, it is difficult to find
generic distinctions between land use change and forestry
and energy projects, since both categories comprise diverse
project types. The important distinctions among projects
have to do with such things as: a) The level and
distribution of the project's direct financial
benefits. b) How much the project is integrated with the
larger system. c) The project components' internal
homogeneity and geographic dispersion. d) The local
replicability of project technologies. Permanence is an
issue specific to land use and forestry projects. The author
describes various approaches to ensure permanence, or adjust
credits for duration: the ton-year approach (focusing on the
benefits from deferring climatic damage, and rewarding
longer deferral); the combination approach (bundling current
land use change and forestry emissions reductions with
future reductions in the buyer's allowed amount); a
technology-acceleration approach; and an insurance approach.