CARBON OFFSETS & RECs
Carbon Offsets
A carbon offset is a payment that a purchaser makes to counterbalance his or her greenhouse gas emissions. This payment funds an off-site greenhouse gas reduction so that a net of zero additional GHG is introduced into the atmosphere. Payment may go to one of many project types, including:
- Renewable energy projects;
- Energy efficiency projects; or
- Biological sequestration projects, such as reforestation or land use change (these are less effective than the other two).
How to Determine Offset Quality
Prices of offsets vary, and it is important to understand why all offsets are not of equal quality. The carbon offset market is young, and strict standards have not been fully established. Two important questions that reveal the quality of an offset are:
- Is the offset “Additional”
- Has the offset been certified, and if so, by whom
Additionality
The central concept of carbon offsets is that the purchaser’s payment to the offsetter allows the offsetter to complete a project that results in a reduction of GHG emissions. The “Additionality test” attempts to determine if an offsetting project would have happened in the absence of the offset payment. If the answer is yes, the project is not additional. Additionality is difficult to determine with certainty, but a set of tests have been developed to assess Additionality.
Legal and Regulatory Additionality Test: If a project was implemented to fulfill regulatory obligations like the RPS, industry standards, or official policies, it cannot be considered additional and should not be eligible for offset payments.
Financial Additionality Test: Was the revenue from offset payments a decisive factor in implementing the project – if so, the project is financially additional.
Barriers Test: A project that overcomes non-financial barriers, such as local resistance, institutional barriers, etc, that would not be faced by a business-as-usual project is considered additional.
Common Practice Test: A project that derives GHG emission reductions from a practice that is commonly employed, such as a forestry company replanting land that was clear cut, is not considered additional because it would have occurred in the absence of the offset payment.
Offsets that pass the Additionality tests are more valuable and meaningful that non-Additional offsets. In fact, offsets that are not Additional should not be considered as representing GHG emissions reductions at all. Non-additional offsets are the fodder for the common lament that offsets, instead of effecting actual GHG reductions, are only a way for institutions or individuals to soothe guilty consciences by subsidizing projects that would have been occurring anyway.
Certifiers
Third-party certifiers assess offsets for Additionality, assure that offsets are not being double-counted (claimed by more than one entity), and ensure that the quantity of offsets sold by the project matches the offsets actually realized. The most rigorous third party carbon offset verifier is The Gold Standard
Carbon Offset Providers
The Tufts Climate Initiative examined the voluntary carbon offset market to determine which companies were the best. The looked at multiple factors including additionality, double counting, types of carbon credits, standards, verification, transparency, and calculator accuracy. Tufts found that the prices of offsets vary, but they feel that it is better to pay what you can afford to support better projects and offset fewer emissions than investing in lower quality projects. If you would like to purchase carbon offsets, the following companies are the best:
More Information on Voluntary Carbon Offsets:
Voluntary Offsets for Air Travel Carbon Emissions, Tufts Climate Initiative (47 page report)
Flying Green: How to Protect the Climate and Travel Responsibly, Tufts Climate Initiative (2 page handout)
A Consumer's Guide to
Retail Offset Providers, Clean Air Cool Planet (44 page report)
Renewable Energy Certificates
RECs represent the environmental attributes — such as lower greenhouse gas emissions or reduced pollution — associated with the generation of electricity from a renewable source, such as wind, solar, or biomass.
RECs do not represent actual electricity; however, they are a convenient way to offset electric use. RECs are sold as kilowatt hours — an average home uses 900 kWh/month, according to the US EPA. However, the use of RECs as carbon offsets is somewhat contentious, and the most conservative offsetting scheme would offset electricity with true carbon offsets, not RECs.
Offsetting other energy sources — such as natural gas, gasoline, or fuel oil — should not be accomplished using RECs, because it is not easy to equate electricity with other fuel types. True carbon offsets should be used to offset these types of greenhouse gas emissions. A true carbon offset is sold by ton of carbon dioxide reduced. The highest quality offsets, which have been extensively verified, cost $15 to $19 per ton. To purchase carbon offsets, you must first calculate your greenhouse gas emissions, then purchase carbon offsets equal to those emissions.
Harvard has a contract with Sterling Planet (a Green-e certified company) to purchase RECs at a discounted price.