This page summarizes the results of a 2010 project collecting existing offset protocols from various cap-and-trade programs.
Introduction to Offsets
In a cap-and-trade system that permits the use of offsets, a source of greenhouse gas (GHG) emissions that is subject to the cap could, rather than directly lowering its own emissions, instead “offset” some portion of its emissions by paying an uncapped source to demonstrate reduction of an equivalent quantity of emissions.
Offsets can moderate the cost of GHG abatement by allowing capped sources to use the least-cost means to meet their obligations; engage sectors, such as agriculture, that may not otherwise be subject to mandatory GHG abatement requirements; and direct a flow of funds to sectors, such as innovative green technology, that can contribute to GHG mitigation. Because offsets permit the capped emitter to reduce its own emissions by a lesser amount, however, it is critical to closely regulate, monitor, and limit offset projects to ensure their integrity. In other words, the emissions reductions offered by offsets must be real, verifiable, additional to the business as usual scenario, and permanent.
Offset protocols (also referred to as standards or methodologies) generally set forth a methodology for quantifying emissions reduction from a proposed offset project, as well as requirements to demonstrate additionality, permanence, and certainty, and are developed to ensure that the proposed project produces the emissions reductions for which it is being paid by a capped source. Offset protocols for a wide variety of project types abound. These protocols have been developed for offsets in voluntary carbon markets and the few mandatory carbon markets that exist, including under the Kyoto Protocol/United Nations Framework Convention on Climate Change (UNFCCC). Protocols developed for use in the UNFCCC regime are by far the most numerous, and are accessible here.
The Waxman-Markey bill passed in the House of Representatives in June of 2009 would permit 2 billion tons of GHG offsets per year, and directed an independent Offsets Integrity Advisory Board to study, recommend, and work with the Environmental Protection Agency (EPA) in the EPA’s promulgation of regulations to establish an offset program. The Advisory Board’s review of “approved and potential methodologies, scientific studies, offset project monitoring, [and] offset project verification reports” is intended to address “scientific, technical, and methodological issues” and ensure that offset credits issued by the EPA “do not compromise the integrity of the annual emission reductions” (H.R. 2454, § 731). The proposed Kerry-Lieberman Senate bill has similar offset provisions. Sabin Center has produced summaries of the Kerry-Lieberman domestic and international offset programs, including comparisons to their counterparts in the Waxman-Markey bill.
Sabin Center’s Offset Protocol Compilation
To aid in the assessment and comparison of the vast variety of offset protocols produced by a number of different entities around the world, Sabin Center has produced a compilation of available offset protocols currently in use. The database linked below is organized by sector (agriculture, electricity, forestry, industrial, mining, oil and gas, transportation, and waste management). Each protocol is identified by name, activity type, the entity that developed it, and a brief description. Links to the protocol itself and to the developing entity are also provided.
Sabin Center would like to acknowledge the work of Nidhi Hebbar in compiling this database. We will be updating this compilation and would like it to be as comprehensive as possible. Readers are requested to send any additional protocols to firstname.lastname@example.org.
The database is available here.
Other Helpful Resources:
- The Joint Implementation Network has compiled a list of non-ETS offsets literature as well as a list with links to non-ETS offset schemes.
- The California Air Resources Board is currently working to develop and adopt offset quantification methodologies. The board’s activities in this area, including notices for public workshops, are regularly updated here.
- Ensuring Offset Quality: Design and Implementation Criteria for a High-Quality Offset Program (May 2010) is a white paper jointly released by the Midwest Regional Greenhouse Gas Reduction Accord, the Regional Greenhouse Gas Initiative, and the Western Climate Initiative, that reviews key offset policy design and implementation principles. Commentary on the white paper is available here.
- Ken Allinson et al., International Avoided Deforestation Offset Projects: Insuring the Risk of Reversal Penalties, Center for Law, Environment, Adaptation and Resources, May 2010
- Offset Handbook for the Regional Greenhouse Gas Initiative (RGGI) Model Rule
- American Carbon Registry Standards and Methodologies
- Carbon Offset Solutions, Carbon Offset Protocol Review (Nov. 2007): is a useful, although somewhat dated, analysis of various offset protocols