Modeling the Economics of Greenhouse Gas Mitigation Summary of a Workshop (2011) / Chapter Skim
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4 Offsets - What's Assumed, What Is Known/Not Known, and What Difference They Make
4 Offsets - What's Assumed, What Is Known/Not Known, and What Difference They Make
Pages 13-18
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From page 13... ...
For example, if the United States makes a commitment to reduce greenhouse gas emissions but finds it less costly to reduce emissions in another country, domestic or international policy might allow the United States to meet its obligation in the countries where the low-cost opportunities occur. Kopp noted that it is important to verify that such emissions reductions in the low-cost country would not have occurred in the business-as-usual case and so can be certified as additional reductions.
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From page 14... ...
Such a situation would create a policy dilemma if offsets from non-OECD countries were desired for reducing OECD countries' compliance costs at the same time that insistence grew for non-OECD countries to accept emissions reduction targets to help meet a global stabilization target. Blanford then outlined the potential size and cost of offsets available in a system in which emissions are capped for the United States and other OECD countries.
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From page 15... ...
Although markets can change land-use patterns in a time period that short -- agricultural expansion has converted forested to cleared land on a scale of 100 million hectares worldwide over the past 15 years -- there are currently no government programs that can produce this level of land-use change over such a short time period. The policy design issues that Sohngen mentioned for carbon offsets included baselines and additionality in essence, can it be shown that the action that generated an offset credit (e.g., planting trees)
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From page 16... ...
One of the biggest policy design issues may be leakage, whereby activities designed to cut greenhouse gas emissions and implemented in one jurisdiction or project lead to the shifting of the targeted emitting activities elsewhere, thus undermining the overall effort to reduce emissions. The final design issue discussed by Sohngen was measuring, monitoring, and verification (MMV)
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From page 17... ...
The first was that international offsets exist because of a political deal: the less-developed countries have interests different from those of the highly industrialized countries and are not going to spend their own resources in a major way on controlling emissions, and so offsets serve as a compensation mechanism to engage them in one form or another in reducing greenhouse gas emissions. His second point was that the debate about offsets is typically viewed completely through the lens of compliance costs.
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From page 18... ...
Adele Morris from the Brookings Institution noted that the presentations and the modeling and policy challenges discussed in these talks pointed to some of the political problems for offsets. One, based on the EPA analysis presented by Allen Fawcett, is that the United States would be spending six times as much on imported allowances under H.R.
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