Offset Additionality is Key

There is no more misunderstood and disparaged word in the field of carbon offsets than the word “additionality.”

“Additionality” has been (by far) the biggest challenge that has faced acceptance of carbon offsets as a climate change mitigation tool, and that has undermined the environmental integrity of carbon markets. But what is additionality when it comes to allowing GHG emissions reductions into voluntary or regulated carbon markets as carbon offsets? (hint - the cartoon nails it!)

The cartoon makes light of something that sounds simple enough, but that is actually a very complicated challenge.

For example, with regard to the reforestation project made fun of in the cartoon, the carbon sequestration would have occurred regardless of the carbon market (although perhaps delayed). It is therefore non-additional, and not eligible for carbon offset status (at least it shouldn’t be).

Here’s a quantitative example of why additionality is so important to carbon offset markets. In the simple graphic below, based on a quick back-of-the-envelope calculation in 2010, we’ve pulled together “non-additional” emissions reductions in the U.S. In other words, GHG emissions “reductions” and “sequestration” that are already happening for reasons having nothing to do with a carbon market or the generation of carbon offsets. People currently take the bus to work, ride their bikes to work, or buy Priuses to get to work. Electricity is produced by wind farms and nuclear power plants, people are planting trees, etc. When we added up these tons, they totaled almost 2 billion tons of CO₂.

Allowing these “non-additional” tons into a carbon market would probably dramatically undercut (or negate) the climate change benefit of the market (depending on its size, and what else was being allowed into the market).

You may have already noted that many of the reductions shown in the graphic resemble the “kinds of reductions” we might want to incentivize via a carbon market. Excluding them from the market might seem “unfair” to the people who engaged in reducing emissions without any knowledge of carbon markets. That may be, but at the end of the day balancing “fairness” and “climate benefit” gets tricky very quickly. Would you be happy with a “fair” offset market that doesn’t benefit the climate?

The question when it comes to offsets, therefore, is not whether additionality is critical to the environmental integrity of carbon markets. It is. The question is how to distinguish between these “non-additional” reductions, and reductions that should be allowed to participate in an offsets market. That involves Additionality Testing, and as shown in the slide below, it is truly a tough nut to crack given that we can never empirically measure additionality.