Day: August 14, 2012

Real, Additionality, RECs

Posted on Posted in Carbon Opportunity, Hot airTagged , , , , , 3 Comments

Observing CTi’s Carbon Offsets 2 day Masterclass offering, it occurred that a US based mob was on about getting real about ‘real’ carbon offsets. Curiosity lead to checking out the reporting standard AS/NZS ISO 14064, finding it is silent on the word or term ‘real’ and completely avoids the topic of additionality, was fascinating given that you can’t even conceive of an offset without the concept of additionality!

CO2Land org now ponders: If ‘real’ cannot be a guarantee of a good project outcome. It follows that the use of the word or term ‘real’ can be seen as a initial or promised activity increase and not be seen as a guarantee of an increase in the carbon offset (it could be real activity and still lead to a decrease of carbon offsets). So if I say it was real at the time I acted; it was an act in good faith only. The issue with the word ‘real’ is it literally means the activity is a cause of change.

This lead to thinking of the impact this has on the Carbon Farming Initiative as legislated when the Gold Standard and Carbon Fix require that projects be “real”, but no international standard could explain what they mean by using the terms.

Now lets talk of the other mob: In their story –

Getting real about “real” carbon offsets,  by Michael Gillenwater –it was said:

“The qualities of a good emission offset project are one of the most common refrains you hear in the carbon offsets community. You can probably repeat most of them by memory: real, additional, permanent, verifiable, etc. Different programs or protocols might add other points about leakage or accuracy, or conservativeness or some other offset quality principle. But common to almost all programs and standards and protocols is the criterion that offset projects or credits must be ‘real’. Here is a question for you: What does it mean for an offset project to be real? What would an unreal offset project be? How could we tell if it was unreal, and is this something we should be concerned about?”

They go on to look even closer at the word or term ‘real’:

If you check out the Offset Quality Initiative and how they express the term ‘real’ and explain it the word should be done away with entirely as it is not meaningful, or at least ambiguous, and those that use the term are employing vacuous language. They claim the problem for ‘real’ is it most likely used to describe itself is real, and used this way one cannot ban imaginary projects, and one may ‘forward credit’. That is you can issue a credit before emissions have been achieved.

They continue that where ‘real’ is covered with a contrived definition and includes the concepts of completeness and accuracy in accounting, and leakage. It does so as no more than use ‘real’ as a synonym!

Now how do the markets act responsibly on handling this issue:

  • The Clean Development Mechanism (CDM) rules states that offset projects must be “real” in various places, but the definition is absent.
  • The Verified Carbon Standard (VCS) does attempt to handle this and goes with the imaginary friend test: All the GHG emission reductions and removals and the projects that generate them must be proven to have genuinely taken place. Much better description than using ‘real’ – no room for weasels in this one.

CO2Land org looked a little harder (we don’t want this post to be no more than ‘hot air’) and found:

  • Specifically ISO 14064-2 (project accounting) does not include ‘Real’ because during development of ISO 14064-2 ‘Real’ was regarded as a programmatic rule/criteria, which is outside the scope of ISO 14064-2.
  • ISO 14064-2 is a standard rather than a program
  • ISO 14064-2 (Clause 5.4) specifies the following requirement in regards to additionality: “The project proponent shall select or establish, justify and apply criteria and procedures for demonstrating that the project results in GHG emissions reductions or removal enhancements that are additional to what would occur in the baseline scenario.”
  • Additionality is incorporated into ISO 14064-2 is based on the core principles of ISO standards in general, i.e. that ISO standards not be a barrier to trade (WTO-TBT – anyone following development of ISO 14067 (product) will know this is a major issue). As such, ISO standards must be policy-neutral (extended to include program-neutrality). This is of course very important for market confidence.
  • ISO 14064 deals with the concept of additionality by requiring that the GHG project has resulted in GHG emission reductions or removal enhancements in addition to what would have happened in the absence of that project. It does not use the term “additionality”…Thus the project proponent may apply additionality criteria and procedures, or define and use boundaries consistent with relevant legislation, policy, GHG programmes and good practice.”
  • Although the concept/requirement of additionality is within the requirements of ISO 14064-2, the simple reason why the ‘term’ additionality is not present within the requirements of ISO 14064-2 is because of certain sensitivities/perceptions/politics of certain parties involved in the development of the standard –

And, the following references helpful in gaining a more complete understanding:

CO2LAND armed with this information focused more on Australia, and with raised eyebrows takes note ‘real’ is long-overdue for a critique of the ‘real world’ of concepts and terminology defining emissions offsetting and accounting policy and practice. In fairness what becomes obvious is domestically and internationally in Australia have had to deal with the vagaries of the debates and arguments over the development of both an international REDD mechanism and revision of accounting rules for land use, land use change and forestry (LULUCF) by Annex 1 countries.

Dealing with this is not as making the concept closer to simplicity and ‘naturalness’ in terms used as much of the confusion stems from failure to separate out responsibilities for project managers, national/sub-national regulators and for the international community. In short the levels of responsibility presume everyone else should be responsible for everything. Then everything ‘real’ becomes perverse. Source: Alistair Graham
Tasmania, Australia
7 August 2012

Previously CO2Land org has written of the perils of the REDD issues, and that things are going to avoidably get more complex, and Alistair Graham also believes we best get our house in order for the, relatively easier stuff in the non-LULUCF sectors.

Then rock my socks along comes Judith Hull (talking of work with Environment Canada) and commented, August 13th, 2012:

“Michael – In response to your August 9 note on my short comment, I would emphasize that isolating one criterion is always problematic. Clearly baseline setting with functional equivalence is key. We used the ‘real’ criterion to flag that just a cut in production would not be eligible. A project to make that production more efficient (even if total output were to decrease) may well be eligible. Judith”

Is it ‘real’?

Now look at confusion on RENEWALBLE ENERGY CERTIFICATES (RECs):

There are a few other terms bandied about incorrectly.

1) RECs are not offsets. Yet routinely you hear they “have offset their carbon emissions with RECs.” That is wrong on several levels. Yes, it is inconvenient that the word offset can be a verb or a noun. But get it right. RECs can be said to “compensate for” or perhaps “balance” the GHG emissions from electricity consumption, but leave offsets out of the conversation.

2) While we’re hammering RECs, if a facility/organization is buying RECs they are not “powered by wind.” There is no orange extension cord connected to a wind turbine. RECs connect load to renewable power by a contract, not a wire. To say “powered by wind” creates false images in lay peoples’ minds.

3) If a facility/organization is buying offsets or RECs sufficient to equalize all their GHG emissions, they have not attained “climate neutrality.” They have attained “GHG neutrality.” The definition is “no net GHG emissions.” That definition does not define a state of the climate, it defines a state of emissions.

It is wrong to connect climate with RECs – RECs like green power energy are project outcomes.

 

REC References:

 

 

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