AdMit is a new alternative to carbon offsetting that addresses many of the doubts about and weaknesses of carbon trading.
As people and companies wake up to the realities of climate change and the part they play in it, many want to help tackle the problem. Carbon offsetting provides a short-term solution, as it offers an easy means for effectively neutralising the emissions of carbon dioxide (CO2) we produce. Offsetting is ever more popular, but the practice has also raised a number of concerns.
Carbon offsetting usually involves purchasing carbon credits, or offsets, equal in amount to the CO2 emitted from the activity of an individual or company, such as transport, heating or industrial combustion. The CO2 is measured using metric units such as tonnes. These credits come in the form of payments to ‘green’ projects that reduce carbon emissions elsewhere, such as hydroelectric plants, foot-powered water pumps or reforestation programmes.
Carbon credits can be traded under the regulated European Union (EU) or Kyoto Protocol systems or the unregulated voluntary offset market. There are offsetting specialist companies that help industry and individuals evaluate and offset their emissions. Carbon offsets and carbon credits vary considerably in price and also in who benefits from them.
Not so neutral: the trouble with carbon offsets
‘Carbon neutral’ has become a watchword of our times. For certain sectors reducing carbon emissions is required by law, and regulated carbon credit markets are expanding under the EU and Kyoto trading systems. Meanwhile, for those not bound by compulsory schemes, the market for voluntary carbon offsetting is booming.
But many view the fast-developing carbon offset industry with increasing cynicism. There is a feeling that all offsets, far from being a means of taking responsibility for one’s actions, may actually be a means of evading responsibility. They may serve to assuage people’s guilt, yet do little to encourage carbon-neutral lifestyles. There are also the concerns about the lack of standards and regulation in the voluntary market.
There are also development-related concerns. The projects in both the voluntary and regulated carbon markets are driven by the need of people in the North to mitigate, or reduce, their emissions. They do not reflect the needs of Southern communities at the forefront of climate change. Most of these produce negligible emissions, and those are to meet day-to-day demands; yet they are geographically and socioeconomically vulnerable to the climate impacts driven by Northern emissions. Adaptation, or coping with those impacts, is their biggest priority.
Carbon offsetting driven by the needs of the North may even undermine the development of communities in the South. At the same time, very little funding is being directed towards the communities affected by climate change and there is an urgent need to fund community-led adaptation.
So how do offsets fail to deliver?
The following are some of the concerns raised about the effectiveness of offsetting products at cutting emissions and delivering development benefits.
High transaction costs for offsets make small projects that target individual communities impractical.
- Some offset projects have not reduced CO2 production over the long term.
- Difficulties in credit accounting have allowed some carbon credits to be sold multiple times.
- Some projects that have been funded are not sustainable and do little to reduce poverty.
- Offsetting discourages people from taking action to cut their own emissions by allowing them to transfer responsibility for reducing emissions onto others.
- Funds are not targeted to the communities that are most vulnerable to climate change impacts.
AdMit: an alternative to the get-out clause
AdMit guarantees a payment directly from polluters to some of the world’s poorest communities that are most vulnerable to the impacts of climate change. Once these communities are identified, ways through which they can adapt to climate impacts can be pinpointed under the AdMit scheme and by asking responsible entities in the North to support this adaptation.
An AdMit project is an investment partnership between an initiative in an area vulnerable to climate change, and consumers eager to reduce the damage caused by emissions. This kind of project can assist in adaptation, and as investors commit to reduce their own emissions, can contribute to mitigation. Or it can focus solely on adaptation.
The AdMit initiative aims to respond to these concerns by developing an alternative to carbon offsetting. The key difference between Admit and conventional carbon products is that AdMit is a compensation payment, not a get-out clause that allows business as usual; and it is targeted to those who need it most.
When an AdMit project has been clearly defined, market transactions will be transparent. To enable this, adaptation projects need to meet a standard set of principles while capturing the diversity and peculiar characteristics of different areas and the required adaptation strategies.
Adaptation is closely linked to poverty reduction, development, and the sustainable use of natural resources on which the poor in developing countries depend on, among other things. The principles that define an AdMit product will need to take these into account. The fact that AdMit has been developed by organisations who have experience working on these issues in developing countries provides reassurance to the buyers that the product is credible.
Setting a new standard
AdMit will develop a recognised standard from which a range of organisations will be able to benefit. Adaptation/mitigation projects and programmes that meet the AdMit standard will offer recognition and quality assurance to purchasers in the marketplace.
Establishing AdMit demands the clarification of a range of issues, from pricing and standards to transaction models. A consortium of organisations was set up to run AdMit on a pilot basis for 18 months, ending in January 2010. Two requirements are fundamental if the scheme is to make a difference and offer a credible alternative to existing voluntary and compliance carbon markets.
- AdMit must neither excuse nor encourage further polluting behaviour. The scheme therefore needs to incorporate measures to influence buyer behaviour, such as by making certain emission reduction steps conditional for entry to the scheme.
- The screening process for distribution of the resources earned needs to be of the highest order to ensure maximum delivery of adaptation and sustainable development benefits. It needs to draw on the expertise of world-leading development and environmental organisations based both in the South and the North.
- With climate change an ever more pressing global reality, AdMit is one answer to the search for innovative solutions. It is the first product of its kind — a genuinely constructive way for richer countries to admit responsibility for climate change.
Q & A - read the latest update on the AdMit project
The ecomomic feasibility of an international air travel adaptation levy by Muyeye Chambwera with Benito Muller
Contributions from all AdMit consortium members.
If you are an environment, development or research organisation, find out more about AdMit or join the AdMit consortium by contacting us or nef: