What does additionality actually mean?

November 15, 2019

Additionality can be easily summarized in one sentence: an emission reduction is additional if it would not have occurred without a demand for emission credits. Although the concept is seemingly simple to understand, in reality the assessment of additionality is complex and there are misconceptions about what it actually is. In this blog, we try to clarify the concept and provide insight into one of the most important aspects of a carbon offset project.

Additionality is one of the most important criteria in the development and certification of a carbon offset project. Additionality is directly crucial for a project to have so-called "environmental integrity" and for the financing of the project to lead to real emission reductions. The difficulty in assessing whether a project is additional is due to the fact that emission reductions occur all the time and for different reasons. The circumstances of a project and the region in which it is located also change irregularly over time, further complicating the assessment.

 

Emission reduction activities can be driven, for example, by new or stricter legal requirements that impose emission reduction obligations. Investments in emission reduction measures can also be made because they are profitable in their own right without additional financing through carbon offsets. For example, investments in renewable electricity generation are an increasingly profitable business compared to fossil-fuel generated electricity. Similarly, projects aimed at improving the efficiency of light sources are unlikely to be additional as energy efficiency improvements often finance themselves through lower energy costs. For a measure to be additional, financing through emission credits would have to have a decisive effect on whether measures would be implemented.

 

In a well-publicizedstudy published by Öko-institue, 2016, which reviewed the UN's Clean Development Mechanism (CDM) emissions trading framework, it was found that 85% of all CDM offset projects studied had a low probability of being additional. This is mainly because many project types allowed under the CDM, such as hydro and wind, are no longer additional for the reasons described above. In addition, the majority of CDM projects have funding from other sources than carbon offsetting and thus risk having low additionality. Another reason for a lack of additionality may be due to standardized reference scenarios that overestimate emissions if the project did not exist. The reference (or baseline) scenario is the estimate of what emissions would have been without the project. Reference scenarios should be based on conservative overestimates so that the climate benefits of a measure are not valued higher than they really are.

 

 

The assessment of whether a project is additional is complex and needs to take into account several parameters, including

  1. What would the emissions be if the project did not exist?
  2. What are the financial incentives to develop projects without a demand for emission credits?
  3. What technological developments can be expected in the future?
  4. What are the legal requirements that can affect emission reductions?

 

Project developers also need to take into account the region in which the project is located and the current and future conditions. The complexity of these assessments makes it difficult to make binary judgments about whether a project is or is not additional. Instead, it is a matter of assessing whether a project has a high or low probability of being additional.

 

ZeroMission primarily works with the Plan Vivo, Gold Standard and Fairtrade Climate Standard Standard project standards, which have robust and comprehensive systems to ensure the highest possible additionality in the projects that are certified. We also select project types that are deemed to have the highest likelihood of being additional and leading to added value beyond climate benefits. In our tree planting projects through Plan Vivo , an emission reduction is financed before it has taken place, which is called Ex-Ante, increasing the likelihood that the action would not have happened anyway.

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evelina.sundin@ohmy.co

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