We would like to thank everyone who took the time to respond to the survey. We received almost 300 responses. You can view the full results* by clicking here.

Selected survey highlights:

• Respondents were drawn from GHGMI alumni and the broader community
• Two-thirds of respondents had not previously taken a course from GHGMI.
• There remains a high interest in GHG training
• Nearly 60% of respondents plan to enroll in a GHG training course in the next 12 months
• Time constraints and expense were identified as leading barriers inhibiting training enrollment
• Time was the leading barrier to course uptake, cited by 39% of respondents, followed by cost of training (36%)
• Course rigor and flexible online delivery were highlighted as key considerations for selecting a training course
• 58% of respondents identified course quality as among their top three considerations to choosing a course, while 47% called out their interest in being able to participate in classes online, on their own time
• The community expressed an interest in more opportunities for engagement
• 58% of respondents stated an interest in joining a volunteer GHGMI alumni or member committee

We will be incorporating these findings into our operational strategy in the coming weeks and months. Please watch this space for further developments and announcements as we begin to roll out exciting new changes to our programming.

*Note: demographic and text box responses have been omitted for brevity and to protect respondents’ privacy.

So what did the carbon trading community have to say at this moment in North American climate policy? To paraphrase Mary Nichols, chair of CA’s climate regulator, the Air Resources Board: It’s boring …in a good way.

It doesn’t take a public relations expert to see that Nichols’s quip was meant to focus attention, in a “no-news-is-good-news” sort of way, on how smoothly the first few months of carbon trading in California have gone. But her characterization of the market being dull —or “routine” as she actually put it— seems to imply a comparison: boring compared to what? To unpack this pronouncement, let’s put “routine” into context.

The ghost of NACW past

Attending the same conference year-after-year inevitably leads one down a path of reflection. Last month’s NACW was my sixth, meaning I’ve only had a seat to the second act of the 11-year run-up to today’s state of play, still enough perspective to scope out at least two distinct periods preceding today’s “routine” era: “exuberance” and “anxiety.”

Exuberance

Turn the dial back to 2008-2009 and a different outlook held the day. On the one hand, CA had climate legislation on the books and was beginning the march toward implementation, but there was also wind behind the sails of much more ambitious programming: federal US cap-and-trade; regional North American schemes; and even a “grand bargain” international deal. At the time, NACW was but the west coast stop in a heavy rotation of carbon market conferences.

With policy optimism in the air, possibility was on the business table. The era was characterized by presentations chock full of measurements of the day’s carbon market, schematics of those on the drawing board, and speculation of what we should expect to come. But, as the connotation of exuberance has perhaps foreshadowed, the projections of the day turned out to be far ahead of its politics. Most of the markets excitedly described in painstaking operational detail during this period never fully came to fruition.

Anxiety (2010-2012)

As exuberant policy and market forecasts came tumbling back to political reality, NACW returned to the state of the State. By 2010, California was well into the process of operationalizing the market mechanisms called for in its 2006 climate law, but the closer the start date, the faster new obstacles seemed to crop up in the program’s path: lawsuits and administrative hold-ups and political challenges, oh my!

At NACW in this nervous time, delays and legal strategies seemed to be the cocktail chatter du jour as antsy participants apprehensively assessed the program’s timeline. In retrospect there seemed to be less worry over the question of whether the program would materialize and more serious concern about when cap-and-trade would begin. (Chalk that distinction up to what you may …an acknowledgement of California’s propensity for litigiousness and ballot box democracy; fundamental differences between the state’s appetite for environmental action and the Washington consensus; or perhaps just an indescribable can-do “California Cool” attitude.) In the end, the program was delayed a year from its original schedule before beginning this January.

Era of routine feeling

Our quick summary of the last half-decade of California carbon conferencing skips over many of the zigs and zags of this plot’s turns. Indeed, a closer look reveals themes that would be at home in an export of the state’s film industry: buildup, suspense, even stubborn perseverance.

Looking back at those developments and gauging the community’s reaction by recalling the zeitgeist of a particular NACW round, I’m inclined to agree with Mary Nichols: California’s carbon market has become routine. Not because it’s been operating for a long time or because it doesn’t have important challenges/decisions ahead. (Despite the Chair’s reassurance it’s important to remember that the program is barely up-and-running and as for hazards ahead, rest assured, they are in no short supply — see the below *asterisk for a short list.)

In my view, what’s routine is the resolve California’s carbon market community has cultivated over the last 11 years. The highs, lows, twists, and turns of a bruising maturity curve have prepared the community to both cut through the giddy projections that often accompany new markets and stay the course during anxious times. Perhaps this vision of “routine” can provide a roadmap for policy and practitioner communities struggling with the challenges of today’s carbon politics.

Keeping on the theme of carbon politics, this post was inspired by a glance across a particularly gloomy few weeks for climate policy. At GHGMI, we are not in the business of apologizing about the state of the carbon markets or telling folks the sky isn’t falling. (Really, we’re much more comfortable writing about, say: how to harmonize carbon management with other communities, the importance of human infrastructure for when the politics suit expanded policy mechanisms, or some of the wonkier bits of GHG accounting.) However, since we serve such an international community we felt it important to put struggles in one part of the world (e.g., the ongoing EU ETS back-loading saga) into balanced context by sharing the story playing out in our backyard. …of course, if we were ever at risk of coming across as too rosy, we need only share the universally glum news of the day: we are now living in a 400ppm CO₂ world. A challenging reality that will take far more than a positive blog post to counterbalance.

Bore more years

Borrowing the format of a conference panel for my wrap-up: What’s my forward-looking “take away” for the audience?

More boring conferences.

Anathema, right? What about the need for fire and inspiration to push policymakers, market potential and opportunity to drive investment?

Those means may yield those ends. But, for better or worse, if the NACW maturity curve is anything to learn from, expect ambition and innovation to be boxed in to routine incremental process. Antithetical as it may seem, slowing down and building social and political infrastructure from the bottom up may offer a sustainable, resilient, and realistic path to achieve scale and ambition.

…or so we should hope, because as we cross 400ppm, scale and ambition are elements that will need to figure ever more prominently into tomorrow’s policies.

*At the start of a long list of near-term challenges facing California’s cap-and-trade program, there’s: the specter of more legal and political challenges on the horizon, the question of new offset types and supply/pricing impacts, the issue of buyer liability hampering offset transactions, the possible integration of avoided deforestation in future years, linkage with Quebec and other states/provinces, and cooperation with other regions, and many many more issues, not to mention the inevitable unexpected challenges.

A new professionalization initiative

We have previously written in this blog about the importance of professionalization as a tool for improving governance by increasing oversight and developing ethical norms. In line with our mission we have taken a number of concrete steps to further professionalize the practice of GHG measurement and management, including launching a code of ethics for carbon managers in 2009 and more recently collaborating on the EP(GHG) professional certification. Now, for our latest professionalization initiative, we are aiming to advance ethical GHG professional practice through education and capacity building.

Training for integrity

Training is an area in which GHGMI is well practiced. Yet, analyzing climate policy design and implementation for ethical complexity is another challenge altogether. Fortunately, to meet this challenge we have been able to join hands with Transparency International (TI). Through their Climate Governance Integrity Program, TI is applying experience honed over two decades leading “the global coalition against corruption” to the challenges graft and corruption present to programs designed to address climate change.

Working in collaboration with TI, we are developing a new short course to help policy designers, civil society observers, and carbon management practitioners identify and manage ethical complexity in market-based GHG mitigation mechanisms. The course is organized around the following corruption-resistant principles and will be piloted as a part of TI’s in-country capacity building programming later this year.

INTEGRITY

Refers to behaviors and actions consistent with a set of moral or ethical standards that create a barrier to corruption. Principles of integrity are enshrined in codes of conduct and conflict of interest policies for staff, which can covers such issues as vulnerability to political influence or vested business or professional interests.

TRANSPARENCY

Openly disclosing information relating to rules, plans, processes, and actions. Government officials, public servants and the managers and boards of companies all have a duty to act transparently. This allows people outside an institution to monitor its work and to take action when something is not as it should be. It also means that duty-bearers have to answer for the actions and decisions they take.

ACCOUNTABILITY

Is the concept that individuals, agencies and organizations are held responsible for executing their powers properly. Public officials can be held to account by courts or ombudsmen, who can take action against them for improper conduct. NGOs often act as watchdogs to keep decision-makers in check. Citizens can also help hold decision-makers to account when circumstances allow them to, in situations of information disclosure and a free and fair press, for example.

As these descriptions suggest, the challenge of battling corruption extends beyond simply addressing overt abuses of power, such as bribe-taking. In turn, there are a host of opportunities to chip away at the conditions in which corruption (i.e., abuses of power) may take hold. This course aims to empower stakeholders with the knowledge to identify, document, and affect systemic change in GHG program design.

At the same time, the course will equip practitioners to understand and manage ethically challenging situations inherent to systems of GHG measurement, reporting, and verification. Perhaps you’ve found yourself in such a situation before? For instance, if you:

• Were encouraged to incompletely report or describe emissions in a way that could potentially give an inaccurate picture of an inventory;
• Had questions you chose not to raise regarding the quality of activity data, based on the assumption that these issues would be resolved during verification;
• Came across emissions quantification calculations that seemed to “cherry-pick” emissions factors in an apparently arbitrary manner that appeared to favor the client;
• Witnessed what you might consider abuses in which data was labeled “confidential business information” and thus obscured from public scrutiny;
• Felt pressure to overlook data requirements in an audit of a valued client.

But what do you think?

Just as business ethics coursework is mandated at many business schools, should GHGMI require its graduates complete a course on ethics for carbon managers?

Have you ever found yourself in an ethical dilemma while conducting GHG work or witnessed ethically questionable behavior in the field?

As always, we welcome your feedback in the comments section below.

We are excited to be working with Transparency International on this timely and valuable initiative. And, we are hopeful that not only will this effort advance the professional practice in our community, but that it will help seed a dialogue on ethical challenges in policy implementation to complement the macro-level climate ethics discussion.

Well, in the spirit of earlier semantic alerts I’ve posted on misused terminology in GHG accounting (see previous entries on “real” and “counterfactual”), in this blog post I’m going to come after another esoteric GHG-related linguistic bubble with a pointy stick.

First, let’s start with the basics, electricity generators that supply energy to a grid do not produce electrons that flow down wires where they eventually reach your house, building, or factory. Physical electrons exist in these wires. And these electrons (e.g., held in atoms of copper or aluminum) do move through the wire, but at a speed of roughly 0.03 cm/sec (or about 1 meter per hour, a snail’s pace …though only if you’re dealing with a particularly slow snail). In other words, there are moving electrons at play here, but that’s not the main story. It’s the electric field that propagates at the speed of light through the wire, and that does the work (in the thermodynamics sense of the word). The result: when you throw a switch it takes 1/1000 of a second for the electrons 300 km away to start moving at 0.03 cm/sec.

But, components of an electric field are not individually identifiable like electrons are (and according to Heisenberg, it’s not clear how easy it is to identify individual electrons, but I probably just got myself in heap of trouble with the physicists out there; quantum theory and engineers rarely mix). There is just more or less total field in any given place. Everything physically connected to the wire is contributing to the field. The consequence of this fact is that it is impossible to supply electricity from one generator to you and from another generator to your neighbor. All generators and grid operators are able to do is toss more or less energy from each generation source onto the grid and let everyone collectively tap into it. (It even gets a little more complicated because where you toss it in matters as well as other factors.)

This little physics of electromagnetism lesson is relevant to GHG management because the oversimplified and mistaken electrons-in-wires-as-water-in-a-pipe model has led us to an inappropriate framing of a key question. The question concerns how we should allocate indirect emissions from electricity consumption to end users. By approaching the problem with a mental model of electrons flowing down a wire, we have established what I would argue has grown into a full-fledged red herring.

Although the first law of thermodynamics does hold (i.e., total energy is conserved), this is very different from applying a conservation of mass framing to this question. A conservation of mass model would view the system as a bunch of generators contributing to a pool of electricity which then mixes and flows down wires and is sucked out —as if with a straw— by individual consumption devices. But this analogy that every “kilogram” of electricity that enters the grid also leaves the grid is the wrong way to think about it. “Electrical mass” is not conserved in this way. Instead energy enters and leaves the system through many different routes in the form of both work and heat (e.g., line losses) and is affected by many different variables (temperature, material properties, interference by other electromagnetic sources, distance between generators and consumers, etc.). So in the end, what goes into the lines from generators is not exactly the same as what is drawn out to light our houses and office buildings.

At this point you might find yourself nodding, while at the same time thinking I’m missing the point. After all, science is often simplified for policymaking. And while today’s model may not meet the muster of an academic physicist, by many measures it is “close enough” of a system: line losses are small (~7-10%); it’s convenient to ignore other, often immaterial, factors; and not least of all, it’s conceptually useful to bypass the minutiae of electromagnetics to the more infographic-friendly model pervasive in GHG accounting today. The problem? Basing GHG accounting on an incomplete understanding of science leads to poor reasoning, which in turn leads to ill-fitting policies. Case and point is the very supposition that green power markets and programs have been built upon: that every MWh of electricity is fungible with any other regardless of when or where it was added to the grid. The elaboration of this concept being, that this pool of “electrons” can just be added up over a year and their “ownership” allocated to individual consumers, ignoring the realities of space and time and the other variables I listed above. I get to claim the wind electrons and you get stuck with the coal electrons.

The point here is admittedly technical and esoteric (if you read the early posts in my series on misconceptions in GHG accounting, then the erudite nature of my conclusion should come as no surprise to you). But, as I have said before, definitions matter and so do concepts. Call me a purist, but I firmly believe it’s critically important to ground our reasoning when we create GHG accounting frameworks on a sound technical understanding of the underlying mechanics leading to emissions. As GHG professionals, it is important that we establish a rigorous tradition of technical credibility.

Working on implementing climate programs, we face enough adversity as it is. The last thing we need is scientists laughing at us for getting the basic physics wrong. If we want to compromise by assuming something slightly at odds with a purist interpretation of the science, then we should do so explicitly and with transparency regarding the implications of our simplifying assumptions.

So, the next time you hear a GHG accountant describe the “flow of electrons” to their facility, politely intervene and correct them. You may risk sounding a bit pretentious, but you will have taken a baby step to elevate the scientific reputation of our profession in the process.

Note: If you are interested a quick reference on the topic, see the following corroborating link from Argonne National Laboratory: http://www.newton.dep.anl.gov/askasci/phy99/phy99092.htm

Climate literacy is the label given by organizations, such as the U.S. National Science Foundation, to the work of teaching the lay public about climate science and global warming. Let’s be clear, I soundly believe that the world would be better if more people had a deeper understanding of science (perhaps starting with the reality of biological evolution through natural selection).

But working to expand climate literacy, executes on a strategy that assumes teaching more people will change people’s opinions on the topic. This assumption is based on the premise that we are each rational fact-seeking and analyzing actors, open to new evidence and information from generally credible sources. Yet, social scientists (yes, even economists) are increasingly recognizing that humans are not really very rational much of the time. Our consumption of science is not immune from this irrationality. Instead of seeking out new credible evidence, we process information through highly biased filters that can distort our understanding in radical ways. As a case in point, a recent study published in Nature Climate Change showed how attempts to increase climate literacy can actually be counterproductive for some populations (the article is behind a pay wall, but you can read a laymen’s summary here).

Now, I won’t go as far as to argue that we stop trying to teach kids about climate science in schools. If anything we should teach it more, given that it is going to be their problem to deal with since we seem to be mostly postponing doing anything about it now. But putting on my financial watchdog hat, I’d say that investments to teach and convince the broader public of the realities of climate science deserve close scrutiny. To us it seems far wiser to use those resources to help prepare with the skills necessary to address the problem the sub-population that is already interested and engaged. A strategy of focused deep skills development, rather than shallow and broad awareness.

Put more succinctly, in a world of limited resources, we think it’s critically important to separate out public awareness, education, and training, which are all too often lumped together under the banner of “climate literacy.” (To this end, we are excited to see developments to more coherently track these initiatives, for example the reporting infrastructure emerging under the Doha work programme on Article 6 under the UNFCCC.)

Changing minds, moving policy

It’s my belief that ultimately, the visceral impacts of climate change will eventually move a sufficient number of deniers and activate a sufficient number of the ambivalent. You can only deny that the Earth’s core is molten so long if you live on the top of an active volcano. But in the meantime, there are still a number of things we can do, starting by looking at how people actually form their opinions on issues and the powerful role of social networks. In these efforts of persuasion understanding the psychology of those that deny or simply ignore climate change is key (see this useful short video as a start). Making personal connections and gently leveraging social pressure is a good next step. People abhor being out of step with their peers.

But make no mistake, this is easier said than done. Success requires flipping highly networked individuals within communities with a propensity to deny or ignore climate change. I will not pretend to have the optimal strategy for how to do this, although here is a useful guide.

Professional service, personal ethics

Changing public opinion is not part of the mission of the GHG Management Institute for a number of reasons. For one, we are not an advocacy organization. But we do think that all of us individually, as GHG practitioners, bear a professional and ethical responsibility to leverage our personal story. So, the next time you find yourself rubbing shoulders with a dinner party guest who’s all too happy to tell your host that a one-world-government conspiracy underpins climate change, speak up. With all respect and with no prejudice just explain that you do not see it that way because your life experience has brought you to another conclusion. There’s no need to try and argue or convince anyone, and thereby provoke a defensive response. And in contrast to what you may want to do, which is distance yourself from an ideologically driven idiot, make an effort to identify with the person on a broader level while maintaining the awkward social disharmony on the one point of climate change. (For example, I will often create some shared identify with those from the conservative South here in the USA by talking to them about how I am a native Texan and Aggie alum.)

Your thoughts on how to deal with those that deny or actively avoid the issue of climate change are welcome. As a GHG professional community, one of our informal roles will be interfacing with the broader public. When doing so, we should at least strive to do more good than harm. My and your kids will thank you.

Happy New Year.

A problem right in front of us

At the same time, climate change is finally beginning to show itself right in front of our faces. I recently moved from Washington, DC (to gorgeous Seattle if you were wondering). Back in DC, this last spring was the warmest on record (reference: National Climatic Data Center), and across the USA more than 4,300 record highs were broken in March alone. Winter seemed to end in February. I also spent a good part of the summer around Glacier National Park in Montana showing my kids the glaciers now, as they are now projected to disappear in just a matter of years (yes, years, not decades). And just two weeks ago I took the family on a trip up to the base of Mount Rainer here in Washington State. We hiked up a valley where we could see, at our feet, the path of glacial retreat over the last few years. Dozens of football fields of newly exposed ground sprawled out in front of us.

I’m not sharing these observations to convince anyone that climate change is happening. Let’s be honest, if you are reading this blog there is pretty much zero chance you need persuading that climate change is real. No, my point instead is that with our climate unambiguously changing in front of us, we have reached a turning point. It is now acceptable for each of us, as GHG experts, to talk about climate change as something that is happening now versus something that will happen eventually.

Arctic balding

Many of you are well aware of the severity of the science. In the Arctic, the toupée is coming off, and we are seeing the ugliness of the balding process. Last month we witnessed Arctic sea ice extent reach a record minimum (reference: National Snow and Ice Data Center). The area of Arctic ice is half what it was very recently (i.e., in our lifetimes, and yes it is far outside the standard deviation). If you dig deeper into the science and data, you will also realize what matters even more is ice volume (i.e., factoring in ice thickness not just area). This metric is barely a third of what it has been in our lifetimes (reference: University of Washington Polar Science Center). In sum, Arctic ice is getting dramatically thinner allowing even more to melt next year, exposing more ocean surface to summer heating. Repeat.

Besides, being awkward for some of us to explain to our kids how Santa Claus lives on a house boat, why does this matter? The climatologist’s simple answer is that without ice to reflect sunlight, we’ll see more heating of the Arctic Ocean, which is likely to increasingly play havoc with global circulation and weather patterns.

I told you so and so did James Hansen

This is a subject too serious to play “I-told-you-so” with, but it’s worth acknowledging that broadly speaking the scientific community is inherently conservative with their estimates. Looking back I’ve surprised myself with the prescience of my own prediction two years ago in this blog that ice melt would begin to occur faster than most scientists thought. So, I concur with James Hansen. What we are seeing with these signs (along with the myriad other signals including shifting animal migration patterns, etc.) is the product of anthropogenic climate change.

Again, what is sadly ironic is that that while this is happening, the broader public has ceased to focus on the issue. Arguably, climate change was seen as more politically pressing 15 years ago than it is now. Case in point is the EU’s laudable push on aviation emissions. A policy that is not terribly aggressive in terms of its emissions targets. And no one can say that after a couple decades of mostly fruitless multilateral discussions through ICAO, that Europe is ignoring more international options. Yet, the entire world is fighting even this modest policy, which was born out of frustration and inaction by the global community.

Did it have to turn out this way?

Although the optimist could come up with a different scenario, I think that the reality I’ve outlined was almost inevitable. And I feel safe saying that we are going to see a lot more serious weather changes before there is a shift in our collective consciousness on this issue. This means we need to plan and prepare for not just a different planet, but a planet “on the move.” We also need to plan for a society that will at some point shift from blind ignorance to panic at the relative blink of an eye.

So, what do these observations and predictions mean for GHG management?

But where does this leave the GHG practitioner? Do I think that we need to all go out and become activists and scream at our political leaders to act? If you have the drive: go for it. But, I have little confidence that we can shift the politics here. (I’ll address some of the more intractable aspects of climate politics in my next blog post.) What it does mean, however, is that carbon management is not only about measuring and reducing emissions. It is broader than that…it’s about managing emissions in a way that simultaneously enables us adapt to a changing planet. In other words, the job is more difficult than we generally think.

So, our job, as has been said before, needs to be more than just accounting for emissions. It needs to be about managing GHG emissions. And now we have to think about doing this in a way that considers our need to adapt in the face of ongoing changes in the environment due to a changing climate. Such is our challenge, requiring a complex interdisciplinary skillset. Given this state of affairs, it is clear that we are at a critical point in the state of our practice. Contrary to the political winds of the moment, the need to turn serious attention to professional development in the field of carbon management has never been greater.

Probably one of the most frequently cited assertions relating to additionality is that it cannot be proven because it is assessed against a “counterfactual” baseline. Well, I am here to tell you that this line of argumentation is flawed. Certainly, I admit there is a lot that can and should be improved with how additionality and baselines are assessed under all the existing GHG offset programs. (I have previously elaborated on some potential areas for improvement here.). However, the use of “counterfactual” implies that you cannot prove additionality and that it is a completely unreliable determination. This is a mischaracterization of the actual issue.

In my writings, I have previously argued that the term “counterfactual” has been misconstrued when discussing baselines or additionality. A counterfactual is defined as something that is contrary to the facts or not reflecting or considering relevant facts. But it is feasible to ground the models we use for assessing baselines and additionality using good science and proper causal inference techniques. In other words, observations (i.e., facts) from related cases or experiments can be used to develop models that predict behaviors in similar or identical situations. Assuming the models that produce these predictions are based on rigorous studies, I would argue that the outcomes are not well described as being “contrary to relevant facts.” These models are unlikely to be perfect representations of the case being assessed, but, unless conducted with no consideration of good causal inference methodologies, the assessment of additionality can still be based on observed facts from similar cases and other empirical research. As a consequence, I have previously recommended that the term “unobserved” be used rather than “counterfactual” to describe the baseline used for assessing additionality.

But, my thinking has now gone further. I no longer think that “counterfactual” is simply a misconstrued or misused term for talking about additionality. It is actually flat out WRONG.

Sweating the small stuff

It may seem trivial to work up a sweat over semantics. But in my opinion if there was ever a topic requiring precision and care in how we talk about and conceptualize it, it is additionality and baselines in the context of offsets.

For a proposed project or class of similar project activities, additionality is assessed relative to a predicted baseline, which represents a scenario under identical conditions except for the absence of the recognized intervention created by the offset program (e.g., such as the price signal from the potential to earn offset credits). Although it may be possible to observe the behavior of an actor under the influence of an intervention and another similar actor under near identical circumstances where the intervention is absent, it is rarely possible to simultaneously observe the behavior of the same actor under the same conditions both with and without the intervention present.

In a typical GHG offset project cycle, the assessment of additionality follows the development of a predictive baseline model. This assessment occurs at the proposal stage, prior to a project’s implementation. Therefore the baseline for this purpose is not a backward looking counterfactual but instead a forward-looking prediction. Although additionality is characterized as an assessment against a counterfactual baseline throughout the literature on CDM and other GHG offset programs, it remains that something that is set in the future and cannot accurately be considered a counterfactual. In other words, at the time it is actually conducted, additionality is not a counterfactual assessment, but rather it is a prediction.

In contrast to the forward-looking additionality assessment, a GHG offset project’s emission reductions are calculated against a backward-looking counterfactual baseline.

The simple lesson here is: stop calling additionality a counterfactual. It is not.

Baseline bingo

So now that we have identified two applications for baselines (i.e., assessing additionality ex ante and calculating emission reductions ex post), we can think about another question: for a given project, should the two baselines used for assessing additionality and calculating emission reductions be the same and what are the implications of them being different?

[Warning: the following discussion is probably best treated as an advanced topic for more intellectually ambitious readers. So, just to be clear, you have been warned.]

First, it is critical to understand that if a project proponent lacks certainty in the baseline that will be used for determining additionality and calculating emission reductions for their proposed project, this uncertainty will affect their perception of the strength of the offset program intervention. In other words, the more uncertainty in the baseline that a project proponent perceives, the less likely the project proponent is to change their behavior and as a consequence their proposed project is less likely to be additional.

Beyond having this negative feedback on the perceived strength of the offset program intervention, this uncertainty will also lead to one of a number of undesirable outcomes that will reduce the credibility of the overall process. The table below summarizes these outcomes. In the table, A/BL is the baseline used for assessing additionality and ER/BL is the baseline used for calculating emission reductions. Actual is true baseline, which we do not observe, yet it does exist, theoretically. As shown in the table, not maintaining consistency between A/BL and ER/BL effectively assures that there will be a higher error rate in additionality determinations and/or crediting relative to setting them equal.

Table: Possible outcomes with respect to stringency of baselines for additionality determination (A/BL) and emission reduction crediting (ER/BL).

So although we could play games with baselines to try and make them more conservative, thinking we are improving the environmental integrity of the offset program, these efforts are likely counterproductive (from a game theory perspective). Project developers, knowing that their ability to earn offset credits has been altered, will then simply alter their behavior accordingly. Instead we should focus our efforts on coming up with the best baseline prediction we can (i.e., getting our prediction as close to actual as practical) and using that single baseline for both ex ante and ex post applications.

Here is a question for you: What does it mean for an offset project to be real? What would an unreal offset project be? How could we tell if it was unreal, and is this something we should be concerned about?

For years I have never really been clear what we meant when we said offsets should be “real.” But I just went along with it; because everyone else was repeating it, it must be correct. Right? (I was not positive where the concept came from, but my colleague Derik Broekhoff has cited the U.S. Clean Air Act. See below for more historical background.¹) Some things you don’t question because they sound good, even if you are not sure what they mean. You assume everyone else understands and just go with it.

I have even participated repeating the use of the term “real” in my own publications, including our work through the Offset Quality Initiative.

But I am here to tell you that it is all a bunch of gibberish and we should do away with the term entirely and quit acting like it is unambiguously meaningful. We only do ourselves harm by employing vacuous language.

Now you may say that you have seen definitions of what “real” means in the context of offset projects, and that the definition seems reasonable to you. So, let me show you why you have been duped.

I will start with our own Carbon Offset Research & Education (CORE) website to show that I am not just picking on others. CORE refers to the meaning of “real” as:

Offsets should come from real projects that have actually been implemented or will be implemented

Here is a pretty clear case of a circular definition…using the term real to define real. Reading more closely, though, the intended meaning seems to be that offsets cannot come from imaginary projects, or even more specifically that forward crediting (i.e., issuing credits before emission reductions have been achieved) should not be allowed. Forward crediting is a legitimate issue. But it is not clear to me that the term “real” means a ban on forwarding crediting. Wouldn’t it be easier to say: “no forward crediting.”

The Regional Greenhouse Gas Initiative (RGGI) defined “real” as:

Offsets must represent actual emission reductions and not artifacts of incomplete or inaccurate accounting. The effects of a project on GHG emissions must be comprehensively accounted for, and “leakage” in emissions must be factored into the quantification of emission reductions.

RGGI throws in the concepts of completeness and accuracy in accounting as well as the analogous issue of leakage. So does “real” mean the same as accuracy and completeness? Or is real just a synonym for leakage?

In another RGGI document they went further:

For a greenhouse gas offset to be real an offset compliance unit must represent one ton of CO2-equivalent (CO2e) greenhouse gas emissions reduction or removal (carbon sequestration) that results from an identified emissions reduction activity (i.e., a clearly identified action or decision). Offset project emissions reductions or removals must not be an artifact of incomplete or inaccurate accounting. Therefore, a project emissions or carbon sequestration baseline and project emissions reductions or removals must be quantified using accurate quantification methodologies and conservative assumptions where appropriate to account for measurement uncertainty. Quantification methodologies must appropriately account for all relevant greenhouse gas emissions sources and sinks and identified project leakage.

Let’s unpack this one. It seems that “real” for RGGI means pretty much everything. There is a hint at additionality in the language on action or decision. They bring in completeness then credible baselines and next conservativeness followed by leakage. And it seems the principle of accuracy is repeated about half a dozen times. So maybe “real” is just some meta-level principle in line with the surfer dude use of the term. “Dude, that project is soooo real.”

In its presentations of how it interprets AB32, the California Air Resources Board has explained to stakeholders that it views “real” as having the following components:

• Conservative estimates
• Sound quantification methodologies
• Verified reductions
• Reductions are permanent
• Account for emissions leakage
• Avoid double counting

Again, it seems “real” is all good things to all people, such that it is not clear to me what it doesn’t mean.

The organization formerly known as the Pew Center on Global Climate Change (now the Center for Climate and Energy Solutions or C2ES) defined “real” in its briefing on offsets as:

GHG emission reductions should represent actual emission reductions and not simply be artifacts of incomplete or inaccurate accounting.

Like with RGGI, it sounds like what they really meant to refer to is the principles of completeness and accuracy.

Well this is an interesting exercise, you may think. But what do the players that set the market terminology in the first place have to say? OK, let’s run through them.

The Clean Development Mechanism (CDM) rules states that offset projects must be “real” in various places, but I am not aware of the term actually being defined anywhere (if I’ve overlooked something, someone please point out to me in the comments section where they do).

The Verified Carbon Standard (VCS) goes with the imaginary friend test:

All the GHG emission reductions and removals and the projects that generate them must be proven to have genuinely taken place.

I’m not sure we need a new term and principle for something that is already pretty well covered under the concept of fraud. Lying and claiming that some nonexistent offset project activity is taking place would seem to be a pretty obvious case of fraud to me. If we needed to be explicit on it then instead of saying real, how about just “VCS does not allow fraud.” That would seem to address the issue without ambiguity.

From WRI and the GHG Protocol team we have the following:

An offset credit is real if it represents an actual net reduction or sequestration in emissions, and is not an artifact of incomplete or inaccurate emissions accounting, including leakage. Leakage is defined as an unintended increase in GHG emissions caused by a project. A frequently cited example of leakage is a forest sequestration project that simply shifts deforestation activities to other forest land, reducing or eliminating the net sequestration from the project.

Here, again, they seem to view real as being a synonym for both completeness and accuracy, which they also use as separate principles elsewhere. They state that real is also about leakage, and go on to try and explain leakage within their definition of “real.” Why not just talk about completeness and boundaries. How does referring to it as “real” help?

Our friends at the Climate Action Reserve (CAR) offer the following definition for “real”:

Estimated GHG reductions should not be an artifact of incomplete or inaccurate emissions accounting. Methods for quantifying emission reductions should be conservative to avoid overstating a project’s effects. The effects of a project on GHG emissions must be comprehensively accounted for, including unintended effects (often referred to as “leakage”).

Again, we have concepts related to completeness, accuracy, conservativeness (which is in conflict with accuracy), as well as leakage (which is a derivative of completeness).

ISO 14064 is silent and does not use term (it also completely avoids the topic of additionality, which is fascinating given that you can’t even conceive of an offset without the concept of additionality). The Gold Standard and Carbon Fix require that projects be “real” but do not appear to explain what they mean by using the term (again, someone please correct me if I missed something).

What does all this mean? Well, it would seem that we have all acted a bit like a bunch of used car salesman…spouting off terms that sound good to everyone but that don’t really mean anything, or at least not anything well-specified or widely agreed upon. (We might as well have required that offset projects be “beautiful” or “synergistic” or some other corporate buzzword that can be attached to any appealing concept.) It is amazing we have gotten so far in writing standards, laws, and protocols using such a vague catchall term.

So, here is what I am calling on all of us to do. Say what we mean and do away with the term “real” when referring to offset project quality criteria. If you mean completeness, then say “completeness.” If you mean “accuracy” then say that. If you want to forbid forward crediting, then say forward crediting is not allowed. If we want offsets and offset policies to be viewed as credible, then we need to be careful and speak with precision and a purpose instead of just saying what sounds good.

¹ The “New Source Review” program under the United States Clean Air Act of 1977 required offsets to be “real, creditable, quantifiable, permanent, and federally enforceable.”