Criteria for Net Zero Initiative Bonus Session: Offsets Thursday May 20, 14:00 – 15:00 BST Agenda Welcome and intro – Thomas Hale Presentations Alberto Carrillo Pineda – CDP • Naomi Swickard – VERRA • Kelley Kizzier – Environmental Defense Fund • Derik Briekhoff – Stockholm Environment Institute • Questions and discussion
Criteria for Net Zero Initiative Naomi Swickard Chief Market Development Officer, VERRA
The role of offsetting in science-based net-zero targets Alberto Carrillo Pineda Director, Science Based Targets @acarrillopineda May, 2020
Mitigation outcomes to reach net-zero emissions Zero net-emissions by mid-century Decarbonisation Abatement of emissions Substantial reduction of agricultural non-CO 2 Minimisation of non-CO2 emissions emissions despite rapid increase in agricultural output Reduced deforestation and forest degradation Conservation of biogenic Zero net-emissions within a decade carbon stocks Forest management Mitigation outcomes Forest restoration Reforestation Biological sequestration Afforestation Soil carbon sequestration Negative emissions BECCS Important role in the 2 nd half of the Geological sequestration century to counterbalance the DACCS impact of residual emissions and to bring back CO 2 concentrations to Other forms of sequestration safe levels *Indicators for limiting 2 warming to 1.5°C with no or limited overshoot The list of mitigation measures hereby listed is non exhaustive and is included for illustrative purposes only
Components of corporate net-zero strategies Decarbonisation Abatement: Actions that companies take to reduce their impact on the Mitigation outcome climate by reducing greenhouse gas Conservation of biogenic occurs within the emissions associated with their Abatement value chain of the carbon stocks operations and value chain. company Minimisation of non-CO 2 emissions Components of corporate net-zero strategies Neutralisation: Effect of counterbalancing the impact of Mitigation outcome releasing greenhouse gases to the may occur within atmosphere through appropriate GHG Neutralisation Negative emissions or outside the emission removal measures. value chain of the company Avoided emissions through the use of sold products Compensation: Measurable climate (mitigation) outcomes, resulting from Mitigation outcome actions outside of the value-chain of a occurs outside the Carbon finance company to compensate for the value chain of the Compensation impact that a company causes on the company climate. Others 3
What constitutes an effective neutralisation strategy? • Volume and type of GHG • Permanence of released; sequestration option; • Atmospheric lifetime of • Risk of reversal; GHG • Leakage (Direct and • Warming equivalence of indirect); GHG emissions (e.g. GWP*); Shorter-term Longer-term storage storage Harvested wood Geological Biogenic sinks products sequestration Short-lived climate pollutant Type of forcer (e.g. CH 4 , etc) being Long-lived neutralised climate pollutant (e.g. CO 2 , N 2 O) 4
Net-zero as a north star for mitigation (and compensation) strategies • Compensation is not a substitute for abatement of emissions or neutralisation; • When considering sustainability constraints and associated risks, neutralisation is hardly a substitute for abatement of emissions; 5
Net-zero as a north star for mitigation (and compensation) strategies Unabated Share of emissions Compensation emissions of unabated abatement in emissions mitigation strategy Neutralisation Share of of residual compensation / emissions Residual neutralisation in mitigation emissions strategy 2050 Base year 2050 Base year Companies are expected to reduce A transition towards effective neutralisation emissions in line with 1.5°C / Paris- measures (i.e. permanent carbon aligned pathways and encouraged to sequestration) to mitigate residual compensate unabated emissions to help emissions is needed. Yet, this represents a accelerate decarbonisation beyond their transition from the current practice, and this boundaries transition needs to happen in a way that maximises sustainability and climate benefits along the journey 6
Towards a common terminology and credible claims Decarbonisation Net-zero / Carbon Neutrality Mitigation outcome Conservation of biogenic occurs within the Abatement value chain of the carbon stocks company Minimisation of non-CO 2 Climate positive? emissions Components of corporate net-zero strategies Mitigation outcome may occur within Neutralisation Negative emissions or outside the value chain of the company Avoided emissions through the use of sold products Mitigation outcome occurs outside the Carbon finance value chain of the Compensation company Others 7
Offsets in Net Zero Kelley Kizzier Associate Vice President, International Climate EDF
Offsets and Net Zero Obligations • Globally we need to transition to net-zero emissions – In 2050, global net zero with residual emissions balanced by removals • The path to 2050 - to get there we need to enhance emission reductions and removals – Mismatch between mitigation opportunities and resources to mitigate – An important role for countries and non-state actors with net zero commitments to support emissions reductions and removals by transferring resources to enhance and expedite the transition • Urgent Reductions / Time Limited Opportunities – Tropical Forests • Hard to Abate Sectors – Opportunity to leverage climate commitments from these to drive emissions reductions in other areas
Carbon markets can enable greater ambition Total emissions reductions from in billion tonnes CO 2 e 1. The global use of carbon markets could allow nearly doubling climate ambition at same cost, relative to current NDCs Source: EDF
Net Result – Reductions or Removals • Is achieving a net zero target inconsistent with emission reduction offsets? – Not if reductions (and removals) are additional – “Additionality” is fundamental for all carbon credits or “offets” • A simple example – Entity A and Entity B emit 100 and 200 tonnes respectively – Entity A source their emission reductions from Entity B – provide for100 tonnes of reduction – Net Result without support = 300 tonnes – Net Result with support = 200 tonnes – The credits are only “additional” if the reductions would not have happened in the absence of the support. • Also possible for global net zero - another simple example – Entities A, B and C, emit 100, 50 and 0 tonnes respectively – Entity A buys 50 tonnes of reductions from B, and 50 tonnes of removals from C – Net result = 0 emissions • Reductions AND removals must be real, additional, verified and have measures to address permanence and leakage
Ensuring Robust Accounting Source: OECD/IEA CCXG • Accounting of exported units/credits across countries is a key issue • Without robust accounting – NDCs / Net Zero commitments are undermined • Also creates incentives to ensure that reductions and removals are “real”
KEY TAKEAWAYS • We need all the tools in the box- need resources to support reductions and removals • Although everyone offsetting is not consistent with net zero, it does not mean that anyone offsetting is not consistent with net zero – it is a matter of striking the right balance within entities, between entities and over time Thank you! Kelley Kizzier kkizzier@edf.org
Carbon offsets: What role for net zero? Derik Broekhoff May 21, 2020
What is a carbon offset? • An investment in external greenhouse gas reductions or removals in lieu of reducing one’s own carbon footprint • Through offsetting, a claim to mitigation is transferred from one entity to another • Most offset transactions are implemented through the issuance, transfer, and retirement of carbon credits, which convey a claim to certified mitigation
Offset “quality” www.offsetguide.org …Additional? Or would an …Not harming anyone? upgrade have Is this hydroelectric dam happened anyway? displacing people and destroying ecosystems? …Not over-estimated? Is my Or is it a product of offset… bad accounting? …Not double counted? …Permanent? How many people are Or will someone be claiming the reductions logging my offsets from this project? ten years from now?
Aren’t there standards for offsets? • Offset “programs” were created to provide assurance and standardization for carbon credits • But at the end of the day, they have a binary decision to make: Issue a credit Don’t issue a credit • Quality, on the other hand, is not binary! • A program may issue credits for every reduction that scores above a “50” for its level of confidence • But when you buy a credit, is a score of 51 really good enough? Image source: Trexler 2019
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