The role of land-based offsets in Emissions Trading Systems: Key design aspects and considerations for linking

The document examines the role of land-based offsets in emissions trading systems across the EU, Australia, Canada, the US, and New Zealand, as well as voluntary standards. It identifies that differences in the stringency of additionality and the management of carbon reversibility (non-permanence) are primary obstacles to linking these systems. While most schemes use offset mechanisms, New Zealand's approach of including deforestation within the cap is highlighted as a way to bypass additionality and reversibility issues. The paper concludes that harmonizing the generation of forestry offsets is essential for successful future linkage.

• Differences in offset provisions, particularly the stringency of additionality, are likely to be a major obstacle to linking emissions trading systems.
• Reversibility, or the lack of permanence in sequestered carbon, is a unique challenge for land-use and management sectors that can hinder the linking of trading regimes.
• The EU Emission Trading Scheme (EU ETS) is distinct from other analyzed systems because it completely excludes credits from land use, land-use change and forestry (LULUCF) projects.
• New Zealand's proposed system addresses permanence and additionality by including deforestation and agriculture under the cap rather than using an offset mechanism.
• The Kyoto Protocol's Clean Development Mechanism (CDM) addresses reversibility through the use of temporary (tCERs) and long-term (lCERs) credits that expire, placing the replacement responsibility on the entity acquiring the credit.
• Linking systems may be easier when the liability for replacing lost carbon rests entirely with the offset creator, as seen in the New South Wales and proposed US systems through mechanisms like permanent easements or insurance.
• Eligibility restrictions on specific land-based activities or carbon pools are difficult to enforce once systems are linked, as credits from a broader system can flow into a more restrictive one.
• The Voluntary Carbon Standard (VCS) manages reversibility by requiring projects to maintain buffer reserves of non-tradable credits based on a risk assessment of potential future carbon loss.
• The Regional Greenhouse Gas Initiative (RGGI) addresses permanence by requiring legally binding conservation easements that maintain land in a forested state in perpetuity.
• Alberta's system uses 'assurance factors' (e.g., 90 percent for afforestation) to handle reversibility, which prevents liability for reversals from attaching to the project developer or credit user.

APA

TUERK, A., STRECK, C., JOHNS, T., & PENA, N. (2008). The role of land-based offsets in Emissions Trading Systems: Key design aspects and considerations for linking. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-2.pdf

Chicago

TUERK, ANDREAS, CHARLOTTE STRECK, TRACY JOHNS, and NAOMI PENA. The role of land-based offsets in Emissions Trading Systems: Key design aspects and considerations for linking. Climate Strategies, 2008. https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-2.pdf.

Wikipedia

{{cite report |last1=TUERK |first1=ANDREAS |last2=STRECK |first2=CHARLOTTE |last3=JOHNS |first3=TRACY |last4=PENA |first4=NAOMI |title=The role of land-based offsets in Emissions Trading Systems: Key design aspects and considerations for linking |publisher=Climate Strategies |date=August 2008 |url=https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tuerk2008role, author = {TUERK, ANDREAS and STRECK, CHARLOTTE and JOHNS, TRACY and PENA, NAOMI}, title = {{The role of land-based offsets in Emissions Trading Systems: Key design aspects and considerations for linking}}, institution = {Climate Strategies}, year = {2008}, month = aug, url = {https://climatestrategies.org/wp-content/uploads/2014/11/working-paper-linking-2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }