This past week I attended a presentation by Barbara Haya of the Center for Environmental Public Policy at UC Berkeley. Barbara’s talk laid out the case: that offsets could account for most of the reductions under California’s cap and trade system; many offset projects would have happened anyway and thus don’t represent real reductions; and that reductions from offsets are over-credited in California. Her warning was that if Oregon follows this route, its carbon cap program would be awash in many reductions of questionable integrity.
This assessment ignores how California measures reductions to meet its cap and the rigor it employs to ensure offsets are legitimate and conservatively awarded. California currently allows offsets not to exceed 8% of a compliance entity’s emissions and it does not count offsets in its greenhouse gas inventory, which is what it uses to measure compliance with the cap. Therefore, rather than counting for a substantial share of reductions attributable to a cap and trade program, offsets represent additional climate benefits above and beyond the cap.
Dr. Haya’s interpretation of additionality, reductions that are beyond business as usual, employs a financial test before the project is implemented. This approach has its own challenges, as it assumes to know how forest landowners will manage their land for the next century or how changes in different market prices affect the extent to which offset revenues contribute to the bottom line of biogas projects that use dairy manure.
Meanwhile, the San Francisco superior court in California found that the state’s performance-based approach to additionality is scientifically credible. Under this approach projects that exceed a common practice threshold are deemed additional. In practice, this has generally meant that less than 1% of eligible forests and dairies have been awarded offsets to date.
Lastly, there is strong evidence that the accounting used to award offsets in California is very conservative. Methane destruction projects are awarded credit based on a global warming potential of 21, whereas the current science suggests it is as high as 36. This means that approximately 40% of the emission reductions from such projects do not receive credit under California’s cap and trade program.
While scrutiny of offsets is welcome, throwing anything but the kitchen sink against offsets can be dangerous to our climate. As one audience member asked, “Why even bother with offsets if they are so much trouble?”
This probably convenient to say in Portland where the presented occurred, but offset revenues can be an important to rural communities and Tribes whose sole alternative in many cases is resource extraction. This was noted by another audience member as the Warm Springs Tribe in Oregon recently sold offsets through California’s cap and trade program. Additionally, cap and trade programs can only effectively cover 80% of an economy. With the Intergovernmental Panel on Climate Change noting we have only a decade to stave off catastrophic climate change, it’s imperative that we use all options available to us. This is where offset projects on forests, dairies and ranches can play a substantial role today as they are some of the most cost-effective reductions available to us.