AdMit

AdMit was an alternative to carbon offsetting that addresses many of the doubts about and weaknesses of carbon trading.

As people and companies woke up to the realities of climate change and the part they play in it, many wanted 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 guaranteed 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 were identified, ways through which they can adapt to climate impacts could be pinpointed under the AdMit scheme and by asking responsible entities in the North to support this adaptation.

AdMit projects were developed as 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 aimed to respond to these concerns by developing an alternative to carbon offsetting. The key difference between Admit and conventional carbon products wass that AdMit is a compensation payment, not a get-out clause that allowed business as usual; and it was targeted to those who need it most.

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 were planned to take these into account. The fact that AdMit was developed by organisations with  experience working on these issues in developing countries provides reassurance to the buyers that the product is credible.

Setting a new standard

AdMit intended to develop a recognised standard from which a range of organisations would be able to benefit. Adaptation/mitigation projects and programmes that meet the AdMit standard would offer recognition and quality assurance to purchasers in the marketplace.

Establishing AdMit demanded 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.