How do you explain additionality?
If you have worked in the climate change space for very long, you have likely faced this question in one form or another. Try explaining carbon offsets to your sister-in-law and you have two choices. Either you give her a superficial response in an attempt to change the subject or you dive in and try and explain offsets. If you chose the latter, you will find it near impossible to avoid the concepts of a baseline and additionality.
Although I have done my share of dodging the question over the years, it has been the deep dive discussions on offsets (including the work we did as part of the Offset Quality Initiative) that led me to realize, not only did I not fully understand additionality, neither it seems did anyone else. (Or at a minimum any additionality experts out there seem to have serious trouble articulating their full comprehension of the topic.)
There are, of course, lots of opinions about how impossible or complicated additionality is to apply. But it was only when I started looking into the reports and other literature, with the sole purpose of studying how additionality and baselines were addressed, that I realized we had a real problem here. No wonder people are skeptical about offsets. If you look at the climate community’s own words on the subject, we don’t appear to have a handle on a concept we have championed as integral to the policies we have created. Language on additionality and baselines is vague, inconsistent, or both. No two authors seem to define these concepts in the same way without falling back on some platitude like “business as usual.”
Now, it is at this point where I expose a bit of my personality. I have a tendency to be a bit of a gadfly at times (some might go as far to say this time it is more of a Don Quixote complex). Would you spend several years researching and writing a paper on additionality? Well I did. And further, I wrote three papers.
(As an aside, some of the impetus for this research came out of my work comparing Renewable Energy Certificates and carbon offsets and thinking about what really justifies a claim that an activity actually reduces emissions.)
So before I go any further, here are the papers. We released an earlier version of them several months ago. Since then I have received comments from a number of you (thank you!). The versions we are releasing now incorporate the comments as well as some other improvements.
- What Is Additionality? Part 1: A long standing problem
- What Is Additionality? Part 2: A framework for a more precise definitions and standardized approaches
- What Is Additionality? Part 3: Implications for stacking and unbundling
Each of the three papers does something different. Part 1 explores how we got here. Why is additionality important and why is it such a mess. It concludes with a definition for additionality and baseline that addresses some long standing problems.
Part 2 is a beast of a paper. So be prepared. It dives deep into how to be more rigorous in the application of additionality and baselines and do so in a way that enables the development of standardized approaches. Part 2 has an element of guidance to it, but more importantly, it walks you through the theoretical questions we need to answer as a community if we are to defend offsets as a legitimate policy mechanism.
Lastly, Part 3 takes a tangent into the world of credit stacking and ecosystem services. Once you have thought deeply about additionality, then you can reflect on how to deal with cases where you have multiple overlapping offset programs that are crediting multiple environmental benefits. As we know, many project activities produce benefits other than just greenhouse gas emission reductions.
All three papers are written in an academic style. In this blog, I am not going to try and give a complete summary of them in a non-academic style. But I will make a few points.
Defining the definitions
Hopefully, it is already clear to you that proper consideration of additionality and baselines is key to the environmental integrity of offsets. I would go even farther and say that the very concept of an “offset” requires the concept of additionality. You can’t say you have offset some harm unless you can show that you “caused” some equivalent extra good to occur elsewhere. Additionality is about this causal question.
To start, we need to clarify the precise “cause and effect” we are concerned with in the context of project-level accounting for emission offsets? For us, the “effect” is the implementation of the proposed project (the effect is not the reduction of emissions…see Part 2 paper for an explanation why).
Next, we need to specify our “cause”? You can’t try and predict an effect if you never bother to identify the cause with which you are concerned. Ignoring this issue is like saying:
Betsy: “Why should I trust that this offset credit is real?”
Tom: “Because, we caused the project to happen.”
Betsy: “OK, how?”
Tom: “Well we don’t know how, and we avoid thinking about what we did to cause it. But we know we did cause it to be implemented.”
In the offset community this line of thinking is epitomized by the vacuous, and unfortunately widely used, phrase: “the project would not have occurred otherwise.” This type of language is problematic because it is half a thought: Otherwise except for what?
The “cause” is the policy intervention recognized by an offset program. It might be limited to the economic incentive created by the GHG program (i.e., the risk-adjusted offset credit price signal), but it does not necessarily have to be limited as such (for why, see the Part 2 paper). The additionality question then becomes whether this intervention caused the proposed project to happen or whether there was no behavior change resulting from the intervention. How do we answer this question? By assessing whether the proposed project is the same as its baseline, which, if so, indicates that the policy intervention had no effect. Therefore, the definition of additionality is contingent upon the definition of a baseline. And what is a baseline? Well, it is what would occur in the absence of the policy intervention, holding all other factors constant. So, again, we are back to the importance of being precise about what we recognize as the policy intervention.
The problem here is that few GHG programs explicitly specify what they recognize as their policy intervention. Therefore, they leave it to validators, project developers, and media reporters to guess and play games with what is additional. Further, and probably more importantly, their lack of specificity makes it impossible to falsify a determination of additionality. We especially need to be precise about the recognized policy intervention before we can develop standardized approaches (i.e., we have to know what we are setting a standard for).
Avoiding linguistic traps
But my biggest annoyance when discussing additionality —and a very common trap that’s snared no shortage of climate policy wonks— is the circular definitions error. How many times have you read or heard someone say that additionality is about what “would occur without the project” (e.g., the Kyoto Protocol itself includes this type of language). The problem with this way of thinking is that we are trying to understand a cause and effect relationship, as discussed above. We are trying to decide if behavior is being changed. The project cannot cause itself to happen. That makes no sense. It is not the absence of the project that is the defining characteristic of a baseline. It is the absence of our recognized policy intervention. This is what is meant by circular definitions. Saying something causes itself puts you in a meaningless logical loop.
Critics will say that we can’t go trying to get inside the heads of every project developer and investor and predict why they are doing what they are doing. I agree. But it would be good enough to predict what a typically project developer would do. What would a reasonable project developer do under typical conditions in this industry or country under conditions where the recognized policy intervention is absent? This is our baseline.
If we are very precise about our recognized policy intervention we can then call on critics to use more rigorous testing and analysis in their arguments rather than vague challenges. Likewise, we can provide validators and methodology developers clear guidance on what their standardized approaches are to approximate.
Another reason there is so much confusion and frustration on the topic of additionality is that most GHG protocols and standards have provided little help. Both the ISO standard and the GHG Protocol for projects basically punted on the topic. We have gotten so used to sloppy and vague language on additionality and baselines that these non-definitions have started to sound like they actually mean something. Since no one seems to say anything that sounds carefully crafted, we assume it must be OK for us to do the same. It is a classic case of groupthink.
I know this is a challenging topic (and one that most really do not want to discuss), but it is not going away. Either, as a community, we deal head on with the conceptual challenges of additionality and baselines, or we should just walk away from offsets as a policy mechanism. I’m convinced that for us to make progress on offset policy, we first have to be far more precise in our thinking about additionality and baselines.
I look forward to hearing your thoughts and comments on my attempt to do just that.
Why is the GHG Management Institute publishing these discussion papers? To be clear we are not a traditional research institute or think tank. There are plenty of those already. And while we are highly cognizant of the value of research and academic inquiry (we even sponsor a peer-reviewed journal), it is not part of our mission to add to the ongoing 20+ year avalanche of policy white papers and reports. Indeed, we long ago determined that our greatest contribution comes in changing the way GHG management is taught, technical skills are developed, and the resulting practitioner class professionalizes. As we work to achieve that mission our research program selectively identifies neglected research questions we believe are key for the GHG community to grapple with for the benefit of all and to further develop ourselves professionally.