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

This policy brief examines how international greenhouse gas (GHG) emission offsets can be designed to provide a 'net decrease' in emissions, moving beyond the standard one-to-one credit ratio. It analyzes the Clean Development Mechanism (CDM) to identify project types and accounting methods—such as stringent baselines and discounting—that could generate surplus reductions and a net atmospheric benefit.

• The term 'net decrease' as used by the Parties to the UNFCCC at COP17 in Durban remains undefined and could be interpreted through two different reference points: either as surplus reductions where actual abatement exceeds issued credits, or as a net atmospheric benefit where emissions are reduced beyond existing national pledges.
• Achieving a net atmospheric benefit requires a combination of four factors: ensuring additionality of offsets, producing surplus reductions (abatement exceeding credits), avoiding the double counting of reductions, and ensuring surplus reductions do not count toward the host country's own mitigation pledge.
• Certain project types are better suited for generating surplus reductions due to higher confidence in their additionality and lower marginal costs. These include projects reducing industrial gases HFC-23 and N2O, manure management, and methane capture at landfills and coal mines. Industrial gas projects are particularly viable for discounting because their marginal costs can be $1 per tonne or less.
• Several mechanisms can be used to achieve surplus reductions: establishing stringent baselines (lower than business-as-usual), applying pre-issuance discounts on the supply side, or shortening crediting periods. Additionally, buyer countries can implement post-issuance discounts or purchase and cancel credits.
• The document estimates that applying significant discounts to three specific CDM project types (HFC-23 and two types of N2O abatement) could yield between 111 and 136 million tonnes of CO2e in surplus reductions by 2020. The actual net atmospheric benefit of these specific projects is estimated at 80 to 100 million tonnes CO2e, depending on whether the reductions are absorbed by national pledges.
• The Clean Development Mechanism (CDM) faces challenges with baseline accuracy, as 'without CDM' baselines are uncertain. This has led to suspected artificially high baselines in some power sector and HFC-23 projects, as well as emission overestimations due to 'leakage' in adipic acid plants.

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} }