Carbon Accounting for Offsetting

1
Carbon Accounting for Offsetting

• Adam Bumpus
• Environmental Change Institute
• University of Oxford

2
Outline

• Why you need to count
• Fundamentals of offset projects
• Using space
• Crystal-Balls and baselines
• What would you have done anyway?
• Making, moving and removing credits
• Issues

3
Why you need to count carbon

• Carbon offsets imply a relationship - carbon
  reducer and a carbon producer

• To Offset a. To set off as an equivalent
  against something else also (of the
  equivalent) to counterbalance, compensate for.
• Needing to know that a tonne is a tonne is a
  tonne
• Counting the carbon emitted in the North -
  drawing boundaries, using correct data, emissions
  factors
• This presentation to focus on project-level
  accounting

4
Fundamentals of offsetting 1Using space

• CO2 is a uniformly mixed pollutant
• Can reduce anywhere for same impact on the
  atmosphere
• So reduce emissions where it is cheapest/most
  profitable finance projects in developing world
  credits to the developed world

Carbon Offset Company
5
Fundamentals of offsetting 2Crystal-balls and
Baselines

• Setting baselines to find reductions
• Counterfactual scenario - defining something that
  doesnt exist.

6
Fundamentals of offsetting 3What would you
have done anyway?

• Additionality is crucial to offsets
• Offsets need to be additional to what would have
  happened anyway
• Environmental additionality (lower emissions)
• Investment/Barrier analysis (offset project is
  unlikely to be financially attractive course of
  action, and barriers exist)
• I.e. its beyond business as usual in both senses
• Additionality tool and standards - complexity Vs
  flexibility
• If its not additional, then the credits are
  falsely counted

7
Making, moving and removing credits

• Creating carbon the commodity
• Process of turning a chunk of nature into a
  commodity through a project
• Carbon as a slippery commodity
• Transcending space, registeries for carbon
• Commodity travels across space, through various
  networks - some highly regulated, some highly
  unregulated
• International Transaction Log for CDM, others for
  voluntary?
• Retiring credits to make the offset
• Taking the credits out of the system gives you
  the offset
• All to reduce double-counting and create credible
  offsets

8
Issues

• Carbon offsets assume that
• Carbon can be unproblematically commodified
• A tonne is a tonne is a tonne
• But
• carbon as nature sometimes resists
  commodification
• Offsets have material impacts on the ground
  largely not reflected in the credit produced at
  the end. Each tonne not really the same thing.
• Progressive possibilities in boutique credits?
• Whos counting?
• The need for standards, registries, transparency
  in the business for its long-term sustainability

9
Thank you

• Adam Bumpus
• adam.bumpus_at_ouce.ox.ac.uk
• Environmental Change Institute, University of
  Oxford