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

The paper examines the potential for international offsets to provide a net decrease in global GHG emissions, distinguishing between 'surplus reductions' (actual abatement exceeding credits issued) and 'net atmospheric benefit' (reductions beyond country pledges). It argues that achieving a net benefit requires high confidence in additionality, the implementation of measures like pre-issuance discounts or stringent baselines, and accounting rules that prevent double-counting. Analysis of the Clean Development Mechanism (CDM) suggests that industrial gas projects (HFC-23 and N2O) are the most promising candidates for yielding a net decrease, potentially providing 80 to 100 million tonnes CO2e in 2020, provided host countries do not count these reductions toward their own pledges.

• The authors distinguish between 'surplus reductions', where actual emission reductions exceed the number of credits issued, and 'net atmospheric benefit', which occurs when an offset instrument leads to global emission reductions beyond what countries have already pledged.
• A net atmospheric benefit is only possible if surplus reductions do not contribute to meeting a host country's existing GHG reduction pledge, or if the host country has no pledge (such as Least Developed Countries).
• The Clean Development Mechanism (CDM) as a whole is unlikely to yield surplus reductions due to high uncertainty regarding the additionality of major project types, particularly in the power sector.
• Industrial gas projects involving HFC-23 and N2O are identified as the most suitable for achieving a net decrease because their additionality is relatively certain and their marginal abatement costs are consistently low, making them amenable to discounting.
• Applying significant discounts to HFC-23 and N2O projects could yield potential surplus reductions of 111 to 136 million tonnes CO2e in 2020, with a potential net atmospheric benefit of 80 to 100 million tonnes CO2e depending on host country pledge accounting.
• The paper identifies four primary measures to achieve surplus reductions: stringent baselines (setting thresholds below business-as-usual), pre-issuance discounts, shortened crediting periods, and unit cancellation.
• A critical prerequisite for any net atmospheric benefit is an international agreement on pledge accounting to avoid double-counting, where the same reduction is claimed by both the buyer and the host country.
• The potential for a scaled-up offset mechanism to provide net atmospheric benefit via discounts alone is limited because much of the low-cost abatement potential is located in countries that have already made economy-wide emission reduction pledges.

APA

Lazarus, M., Erickson, P., Schneider, L., & Kollmuss, A. (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-WP-2013-06-New-Market-Mechanisms.pdf

Chicago

Lazarus, Michael, Peter Erickson, Lambert Schneider, and Anja Kollmuss. 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-WP-2013-06-New-Market-Mechanisms.pdf.

Wikipedia

{{cite report |last1=Lazarus |first1=Michael |last2=Erickson |first2=Peter |last3=Schneider |first3=Lambert |last4=Kollmuss |first4=Anja |title=Potential for International Offsets to Provide a Net Decrease of GHG Emissions |publisher=Stockholm Environment Institute |date=September 2013 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-WP-2013-06-New-Market-Mechanisms.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lazarus2013potential, author = {Lazarus, Michael and Erickson, Peter and Schneider, Lambert and Kollmuss, Anja}, title = {{Potential for International Offsets to Provide a Net Decrease of GHG Emissions}}, institution = {Stockholm Environment Institute}, year = {2013}, month = sep, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-WP-2013-06-New-Market-Mechanisms.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }