“Mitigation Beyond the Cap” - August 2008
A Series of Briefs on Expanding Climate Mitigation Opportunities
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The potential economic benefits of offsets in a cap-and-trade policy may be critical for the success of a robust climate policy in the United States. The voluntary market, the international regulatory markets, and recent analyses of a possible U.S. market provide a foundation for our understanding of this important piece in the climate policy puzzle, but more work is needed. We introduce this series of policy briefs to provide in-depth assessments of remaining questions and concerns regarding how to best incorporate and benefit from sectors and actors that are outside of a regulatory policy.
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Offsets: An Important Piece of the Climate Policy Puzzle – August 2008.
This short policy brief, written by the Nicholas Institute’s Lydia Olander and Brian Murray, is the first in this series, and is intended to provide an overview of the substantial benefits that can come from using offsets to incorporate outside-the-cap mitigation and the very real remaining concerns.
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Treatment of Early Agricultural and Forestry Actors in a Federal Cap-and-Trade – October 2008.
Treatment of early actors is a critical and at times contentious part of the climate policy discussion. Fairness suggests that parties who have been good actors thus far not be penalized for their good deeds by being left out of the opportunity for compensation in a compliance regime. But efficiency and system integrity require that payment be focused on activities and emission reductions incremental to those already being achieved. This 12-page brief addresses this conflict and examines four considerations policymakers could use to frame their discussions: 1) What will qualify as an early action? 2) Can early actions be eligible for credits after the compliance period begins? 3) Can early actions be credited for pre-compliance activity? 4) Are there ways to compensate for non-additional greenhouse gas (GHG) mitigation activities?
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Addressing Impermanence Risk and Liability in Agriculture, Land Use Change, and Forest Carbon Projects – October 2008.
Greenhouse gas mitigation projects in agriculture, land use change, and forestry (AgLUCF) achieve GHG reductions that can offset emissions elsewhere in the system. But there can be a catch. Carbon stored in soils and vegetation is subject to re-emission, or “reversal,” back into the atmosphere as the result of natural risks such as fires and floods, man-made risks arising from the ease with which a land manager can revert to conventional emitting practices, or contractual risks if projects have a finite time span and the mitigation contract between seller (the farmer or landowner) and buyer (a party wishing to buy credits to offset its GHG emissions elsewhere) expires with no further incentive for keeping the carbon stored. This 14-page brief examines impermanence in AgLUCF carbon projects and reviews options for managing the risk.
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Addressing Leakage in a Greenhouse Gas Mitigation Offsets Program for Forestry and Agriculture -- April 2009
Leakage is the phenomenon through which efforts to reduce emissions in one place simply shift emissions to another location or sector where they remain uncontrolled or uncounted. It occurs “whenever the spatial scale of the intervention is inferior to the full scale of the targeted problem.” The potential for leakage arises when rules, regulations, and incentives for action affect only part of the potential pool of participants or emissions sources. As complete coverage by a policy is difficult, leakage is a problem common to many policies.
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