Potential for International Offsets to Provide a Net Decrease of GHG Emissions

The document examines how international offsets can provide a net atmospheric benefit by generating 'surplus reductions'—where actual emission reductions exceed the credits issued. It identifies key requirements for this to occur, including certain additionality, the avoidance of double-counting, and the use of accounting procedures that prevent surplus reductions from counting toward a host country's pledge. The brief analyzes the Clean Development Mechanism (CDM), suggesting that industrial gas projects (HFC-23 and N2O) are particularly suited for discounts due to low marginal costs. It estimates that applying significant discounts to these project types could yield 111 to 136 million tonnes CO2e in surplus reductions by 2020, with a potential net atmospheric benefit of 80 to 100 million tonnes CO2e depending on host country pledge accounting.

• The term 'net decrease' as used by UNFCCC Parties at COP17 remains undefined and could be interpreted as either surplus reductions relative to an individual offset activity or a net atmospheric benefit relative to global GHG emissions.
• Achieving a net decrease in global emissions requires four specific conditions: certain additionality, the production of surplus reductions (abatement exceeding credits), the avoidance of double-counting, and ensuring surplus reductions do not count toward the host country's mitigation pledge.
• Double-counting is a primary obstacle to atmospheric benefits; if a host country counts offset reductions toward its pledge while the buyer also uses the offsets for its own targets, global emissions could potentially increase.
• Industrial gas projects are particularly well-suited for pre-issuance discounts because their marginal costs are often $1 per tonne or less, meaning discounts are less likely to reduce revenues below the cost of abatement.
• The brief identifies several mechanisms to achieve surplus reductions: establishing stringent baselines lower than business-as-usual, applying pre-issuance discounts, shortening crediting periods, using post-issuance discounts, or purchasing and cancelling units.
• By 2020, applying significant discounts to HFC-23 and N2O abatement projects could generate 111 to 136 million tonnes CO2e in surplus reductions, with a projected net atmospheric benefit of 80 to 100 million tonnes CO2e.

APA

Lazarus, M., Erickson, P., & Schneider, L. (2013). Potential for International Offsets to Provide a Net Decrease of GHG Emissions. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-PB-2013-New-Market-Mechanisms.pdf

Chicago

Lazarus, Michael, Peter Erickson, and Lambert Schneider. Potential for International Offsets to Provide a Net Decrease of GHG Emissions. Stockholm Environment Institute, 2013. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-PB-2013-New-Market-Mechanisms.pdf.

Wikipedia

{{cite report |last1=Lazarus |first1=Michael |last2=Erickson |first2=Peter |last3=Schneider |first3=Lambert |title=Potential for International Offsets to Provide a Net Decrease of GHG Emissions |publisher=Stockholm Environment Institute |date=2013 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-PB-2013-New-Market-Mechanisms.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lazarus2013potential, author = {Lazarus, Michael and Erickson, Peter and Schneider, Lambert}, title = {{Potential for International Offsets to Provide a Net Decrease of GHG Emissions}}, institution = {Stockholm Environment Institute}, year = {2013}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-PB-2013-New-Market-Mechanisms.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }