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The Stockholm Environment Institute issued a report which attempts to quantify the effects of a loophole in the creation of carbon offset credits on EU carbon markets which was removed in 2013.
This study systematically evaluates the environmental integrity of Joint Implementation (JI) in the first commitment period of the Kyoto Protocol.
The analysis indicates that about three-quarters of JI offsets are unlikely to represent additional emissions reductions. This suggests that the use of JI offsets may have enabled global GHG emissions to be about 600 million tonnes of carbon dioxide equivalent higher than they would have been if countries had met their emissions domestically.
Of the six largest project types assessed in more detail, the authors find only one – N2O abatement from nitric acid production – had overall high environmental integrity. The evaluation clearly shows that oversight of an international market mechanism by the host country alone is insufficient to ensure environmental integrity.
Joint Implementation is an activity allowed by the Kyoto Treaty to help countries with firm emission targets meet their goals by implementing emission reduction projects in other countries (including non-EU countries) with likewise emission targets. In practice, this was implemented by the EU carbon markets as carbon credits.
A considerable number of such projects were created in Russia and the Ukraine (though the study cites emission reduction projects in other countries, particularly the former Eastern Bloc) and allowed to sell carbon credits on the EU carbon markets. The study evaluated in particular claims of "additionality" for a sample of these projects, namely, the claim that the projects would not occur otherwise (pp. 5-6 from the report PDF).
In a random sample of 60 projects, the additionality claims do not seem plausible for 73% of the ERUs issued and are questionable for another 12%.
We assessed the plausibility of additionality claims of JI projects through an in-depth review of the information available for a sample of 60 projects, drawn in a representative manner taking into account the host countries, project types and project scale. While this approach has clear limitations – it is a subjective judgment of the authors based on the limited information publicly available – it is based on a careful analysis applied in a consistent manner across projects, assessing the plausibility of the timeline of project implementation and registration under JI as well as the information on the main additionality tests used to determine additionality (investment analysis, barrier analysis, common practice analysis, reference to a comparable project).
Here's an example of a "project type" with "low" environmental integrity (pg. 7):
Natural gas transportation/distrib. [accounts for 10% of Emission Reduction Units (ERU) issued]
This project type involves reducing methane leaks from natural gas transportation and distribution or expanding natural gas networks in order to replace coal or oil.
Additionality not plausible: The project starting dates of the 30 projects located in Ukraine were between 2003 and 2006, while most projects received their Letter of Endorsement only in 2012.
Some overcrediting likely: The network expansion projects assume that they solely replace fossil fuels such as coal and heavy oil. But in rural areas newly available gas would also substitute biomass. The exclusion of the use of biomass may inflate the baseline emissions. For projects addressing methane leaks, the implied leakage rates in the absence of JI exceed historical emission rates reported in Russia's GHG inventory, which suggests that either in the absence of the JI projects Ukraine's emissions from this activity would have risen, or emission reductions claimed by the projects are overestimated.
To give an idea of the scale of these emission credits, the yearly emission cap for the entire EU was 2.08 billion tonnes of CO2 emissions per year for the period 2008-2012. Most of these questionable credits were apparently issued in the years 2011-2012, which makes it up to 15% of emissions for those two years.
(Score: 2) by MrGuy on Thursday August 27 2015, @05:55PM
Back when I worked for a Very Large Company, this was the same smoke-and-mirrors way we paid for every project we did (because they wouldn't give us a budget otherwise).
Say we had 5 data management systems running, and we wanted to consolidate them. We'd add up the licensing cost for any software, the cost of the servers, the cost of the data center space/power/etc. they consumed, the cost of the support staff, etc. for the next three years. Call that $10 million. We'd then point out our cost to develop the new solution that could in theory replace them as $8 million. $2 million was our theoretical savings, and if it was >0, we'd get the $Y to go build it.
This was gamed to a fare thee well. You'll note the ongoing support costs of the NEW system are absent. So are any migration costs. So are any costs we incur while we're in a half-complete state when we have both systems in production.
But more importantly, we got approved for a "V1" of the new product, with a projected scope. When the downstream users of the current system said "Hey, we need Feature A, and it's not in scope for you. We can't migrate to the new system until you build A, we'd happily add the feature to the "Version 2" list, and ignore it from there. We'd never actually BUILD Version 2, of course, but it apparently made people feel good to know that's where we'd fix things. And because we couldn't migrate people (because Feature A, B, C, D, and E were missing from our application), and so we needed to KEEP the old system up, that was apparently fine. When we launched our app, our manager was able to claim "I saved the company $2 million dollars over the next 3 years!" even though the old system was STILL RUNNING and consuming ALL the cost it ever was, but now we'd ALSO incurred the expense (and ongoing maintainence) for the new system. We not only didn't SAVE $2 million, we SPENT an additional $8 million to no real purpose.
For some reason, this was just "the way we did things." Apparently nobody cared that, despite management collectively claiming tens of millions in cost savings every single year, the accrued costs kept going up, even without us building any "new functionality" (because building NEW things was not a strategic priority).
As a manager to achieve savings, and I guarantee you that you'll get savings that look amazing on paper. And probably nowhere else.