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Home » Emissions Trading » Reality Check - The Anatomy of a Good Offset

Reality check – the anatomy of a good offset

Let’s take our Scolel Té, reforestation project in Chiapas and Oaxaca, Mexico as an example. The forest acts as a natural store of carbon and as new trees grow they absorb and sequester carbon dioxide. If the forest is destroyed or degraded – logging and burning are common ways for this to occur – the carbon is released. The project both protects and augments the forest through planting and good management practices. For every tonne of carbon dioxide equivalent (CO2e) the project removes from the atmosphere an offset is issued, allowing you to cancel out an equal amount of your emissions by purchasing and retiring it and for the project to receive the finance it needs to continue reducing emissions.

So far so good but it’s worth considering what could be wrong with such an arrangement.

Scolel Te - ReforestationFirst, what if the work was not being carried out properly or the reduction in emissions was not accurately determined?

Our first requirement is that the emission reductions are both real and measurable. In this case every farmer participating must be accredited and every seedling planted registered. This is monitored by the Plan Vivo Foundation, a registered charity, which oversees the Plan Vivo Standard according to which the offsets will be issued. Such standards provide an internationally recognised framework for the design of the project, the rules by which it operates and an assessment mechanism to check that the numbers add up. In setting up Scolel Té, extensive and rigorous modelling was undertaken, assumptions and calculations were independently reviewed by approved experts and the technical specifications open to scrutiny and peer review. Continuous advancements are made as the project develops.

Second, what if the emission reductions were going to occur regardless of whether the project went ahead or not – for example, if the conservation efforts were already mandated in some way?

What would be the point in supporting it then? So there is a strict condition that all emissions reductions are additional, that is they wouldn’t exist without the intervention of the project. So for Scolel Té checks were made that no legislative decrees enshrined the project and that no commercial land use initiative that could achieve its aims would be economically viable in own right. There were clear financial barriers that would have prevented the project from happening in the absence of carbon finance.

Third, what if the trees were somehow lost at a later point – say the land use was changed after a few years?

If this happened the carbon would be released back into the atmosphere, so the emission reductions must be permanent. The emissions reductions from Scolel Té are quantified in accordance with the IPPC Good Practice Guidelines, which stipulates a reference period of 100 years. The long-term viability of the project has been assessed, the organisational capacity implemented and the land rights secured. Carbon sales based on achieving milestones are of course a crucial part of the projects survival. Not only must the project safeguard the future of the forest but a buffer reserve of offsets is held just in case to replace any emission reductions that could be lost due to accidental damage over this period.

Fourth, what if the logging of the trees simply moved down the road to outside the boundaries of the project?

The project would have shifted rather than avoided the deforestation and there would be no net gain in emissions reductions. This is known as carbon leakage and so Scolel Té had to demonstrate it was designed in such a way that the resources of the community were met within the project boundary. So sufficient land is set aside within this border for agriculture to ensure that timber, fruit, crops and livestock are accommodated and not displaced, with carbon revenues complementing rather than eliminating income from these other activities. One clever solution for Scolel Té was to install fuel efficient cookstoves for families to reduce demand for firewood. Why not charity – paid for environmental services.

Fifth, what if two offsets were issued in place of one? Or the same offset were retired twice?

Then they would no longer be representative of one tCO2e and so not adequately offset your emissions. To prevent this every offset issued is unique – they are issued, tracked and retired through a registry that offers full transparency and given individual serial numbers to ensure no credit is double-sold and that retirement is non-reversible.

And finally, what if someone were just making all this up? You want to be offset not ripped off!

That’s why we insist of projects that must undergo independent verification without exception. This gives us assurance of the environmental integrity of the project from a third party specialist. This is required both prospectively, in order for a project to be approved, and retrospectively, after emissions reductions have been made. As a well-established project, Scolel Té has undergone reviews by the UK Department for International Development, SGS and SmartWood (the independent certification arm of the Rainforest Alliance). As for the Plan Vivo Standard itself, amongst others, the Global Canopy Programme and Rainforest Alliance have both identified as best practice. http://www.planvivo.org/about-plan-vivo/endorsement-and-support/. It’s even referenced in the seminal Stern Review.

All of our projects must meet the stringent criteria of creating real, measurable, additional, permanent, unique and independently verifiable emission reductions that are insulated against carbon leakage. There are only a handful of international standards that do this, and so only a handful we work with, Plan Vivo is one of them – see the others we work with here. [Link to Project Standards]. These are the only five standards recommended in the Carbon Trust report commissioned by UK government and are consistently ranked at the top of their respective scopes. We happen to have helped developed a couple of them and made major contributions to a third. In addition we also offer projects from CAR, which is specific to the US, meets the same criteria and delivers offsets interchangeable with one of the international standards.

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