In 2008, EPRI launched the EPRI Greenhouse Gas (GHG) Emissions Offset Policy Dialogue project. The goals of this project are 1) to inform key constituencies involved in the development of U.S. climate mitigation strategies and policies about GHG emissions offset–related policies and design issues and 2) to provide a forum in which representatives of key sectors of the U.S. economy and communities involved in the ongoing development and debate on climate change policies can discuss these issues.
On May 13, 2009, EPRI hosted its 5th GHG Emissions Offsets Workshop in Washington, D.C., as part of this project. This workshop focused on the potential opportunities and key challenges associated with developing large-scale GHG emissions offsets from projects and activities designed to reduce GHG emissions from tropical deforestation and forest degradation.
This report is intended primarily for senior managers and environmental staff of U.S. electric companies. The information should provide a comprehensive understanding of the potentially important role that GHG emissions offsets derived from REDD-based activities may play in helping to mitigate global climate change and reducing the costs of complying with future requirements to reduce GHG emissions that contribute to global climate change.
To date, international climate agreements have focused primarily on achieving reductions in developed country CO2 emissions from fossil fuel combustion. However, because GHG emissions associated with land use, land use change, and forestry (LULUCF) account for roughly one-fifth of total annual global GHG emissions, policy makers now recognize that LULUCF emissions need to be placed on an equal footing with sectors such as the electric power sector.
Approximately 80% of anthropogenic CO2 emissions during the 1990s resulted from fossil fuel burning, with roughly 20% from land use change (primarily deforestation). Average annual fossil fuel CO2 emissions during 2000–2005 were 26.4 GtCO2, of which approximately 30% can be attributed to electric power generation. Average annual LULUCF emissions, estimated at 5.8 GtCO2, are equivalent to nearly 20% of annual fossil fuel CO2 emissions. Within the LULUCF category, deforestation is the main contributor to global CO2 emissions.
This EPRI project has used a lessons-learned approach to identify, describe, and assess the impacts of design elements incorporated in existing and proposed offset systems and that significantly impact their ability to achieve environmental and economic objectives. To achieve the project’s goals and explore the myriad of design issues related to the development of offset programs, EPRI hosted a series of interactive offset workshops in 2008 and 2009. Earlier this year, EPRI hosted its 5th GHG Offsets Workshop on REDD in Washington, D.C. The background materials developed for that workshop provided the foundation for this EPRI technical update report.
This technical update report highlights background materials developed by EPRI and Natsource in 2009 to support the 5th EPRI GHG Emissions Offsets Workshop on Reducing Emissions from Deforestation and Degradation (REDD).
Application, Value and Use
Although debate continues regionally, nationally, and internationally about how to respond to global climate change, it is becoming increasingly clear that U.S. electric companies may face future requirements to substantially reduce and/or offset their GHG emissions. The extent to which domestic and international offsets may be used to comply with emissions reduction requirements that may be incorporated in evolving U.S. domestic GHG cap-and-trade programs has become increasingly controversial in the United States as policy makers seek to design climate change policies.
Policy discussions to date in the United States have focused on potential development of "economy-wide" GHG emission caps, which implies that there will be relatively few opportunities to reduce emissions domestically in "uncovered" economic sectors to generate GHG emissions offsets. Given this, there is increased interest in better understanding the potential role that international offsets may play in evolving U.S. climate policy. The largest potential source of offsets globally is projects that reduce emissions from deforestation and degradation.
EPRI-member companies have significant interest in the potential role that GHG emissions offsets may play in climate change policy. Over the past decade, EPRI members have supported fundamental research and development activities related to evaluating and implementing GHG offsets such as forest carbon sequestration and nitrous oxide (N2O) emissions reductions associated with altered agriculture crop production practices.
As climate policy continues to evolve at the U.S. state, regional, and federal levels, electric companies will have a key role in helping to define evolving offsets policy as well as the role that offsets will play in climate policy.
This report is designed to provide EPRI members and others with a comprehensive understanding of the potential role and key challenges associated with developing and using GHG emissions offsets from REDD-based activities and programs. EPRI is hopeful that an improved understanding of REDD-based offsets and their potential role in climate mitigation will lead to more thoughtful and productive public policy deliberations regarding these important issues.