THE ELEPHANT IN THE ROOM: INTERNATIONAL OFFSETS IN EU’S 2020 CLIMATE LEGISLATION

The document examines how international carbon offsets under the Clean Development Mechanism (CDM) and Joint Implementation (JI) have contributed to an oversupply of allowances in the EU Emissions Trading System (EU-ETS) and the Effort Sharing Decision (ESD). It highlights critical failures in 'additionality', noting that many projects would have occurred without offset funding, and points to a lack of sustainability and human rights protections. The author recommends a ban on industrial gas projects, large-scale power projects, and JI track 1 projects for the 2013-2020 period.

• International offsets have significantly increased the oversupply of allowances in the EU-ETS; they almost doubled the oversupply between 2008 and 2011 and are projected to account for three quarters of the oversupply by 2020.
• There are severe concerns regarding the environmental integrity of Kyoto offsetting mechanisms, with estimates suggesting up to 70% of CDM credits issued between 2013 and 2020 may not represent real emissions reductions, and over 90% of JI offsets from Russia and Ukraine lack international oversight and transparency.
• Large-scale energy projects—including hydropower, wind, natural gas, and coal power—are identified as having questionable additionality, with projections that 70% of all issued offset credits between 2013 and 2020 will come from these project types.
• The CDM has failed as a development tool because sustainability benefits have no financial value, host countries define their own often-perfunctory criteria, and there is no mechanism to suspend projects for human rights abuses, as seen in projects in Honduras and Panama.
• Under the Effort Sharing Decision (ESD), international credits can meet approximately two thirds of the overall emission reductions required by 2020, but quality restrictions are inconsistent because decisions are made at the Member State level rather than the EU level.
• Carbon Market Watch recommends banning offset credits from industrial gas projects (HFC-23 and N2O from adipic acid), large-scale power projects, and JI track 1 projects for both the EU-ETS and ESD from 2013 to 2020, alongside a 'do-not harm' assessment for human rights.

APA

Carbon Market Watch (2013). THE ELEPHANT IN THE ROOM: INTERNATIONAL OFFSETS IN EU’S 2020 CLIMATE LEGISLATION. https://carbonmarketwatch.org/wp-content/uploads/2013/10/NC-Policy-briefing-16-OCT-2013.pdf

Chicago

Carbon Market Watch. THE ELEPHANT IN THE ROOM: INTERNATIONAL OFFSETS IN EU’S 2020 CLIMATE LEGISLATION. 2013. https://carbonmarketwatch.org/wp-content/uploads/2013/10/NC-Policy-briefing-16-OCT-2013.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=THE ELEPHANT IN THE ROOM: INTERNATIONAL OFFSETS IN EU’S 2020 CLIMATE LEGISLATION |date=October 2013 |url=https://carbonmarketwatch.org/wp-content/uploads/2013/10/NC-Policy-briefing-16-OCT-2013.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2013elephant, author = {{Carbon Market Watch}}, title = {{THE ELEPHANT IN THE ROOM: INTERNATIONAL OFFSETS IN EU’S 2020 CLIMATE LEGISLATION}}, institution = {Carbon Market Watch}, year = {2013}, month = oct, url = {https://carbonmarketwatch.org/wp-content/uploads/2013/10/NC-Policy-briefing-16-OCT-2013.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }