New Series of Policy Briefs Assesses Greenhouse Gas Mitigation Opportunities "Beyond the Cap"

Contacts: Lydia Olander, 919/613-8713, lydia.olander@duke.edu; Eric Roston, 202/797-6500, eric.roston@duke.edu; or Tim Lucas, 919/613-8084, tdlucas@duke.edu

DURHAM, N.C. – The Nicholas Institute for Environmental Policy Solutions at Duke University has launched a new series of briefs that assesses how best to use offsets to incorporate greenhouse gas (GHG) mitigation from sectors and actors outside a regulatory policy.  

The series, “Mitigation Beyond the Cap,” can be downloaded at nicholasinstitute.duke.edu/mitigationbeyondcap.

“The potential economic benefits of offsets in a cap-and-trade policy may be critical for the success of a robust climate policy in the United States,” says series co-author Lydia Olander, senior associate director for ecosystem services at the Nicholas Institute. “The voluntary market, the international regulatory markets, and recent analyses of a possible U.S. market provide a foundation for our understanding of this important piece in the climate policy puzzle, but questions and concerns remain. The goal of this series is to provide in-depth an analysis that helps policymakers, business leaders and landowners address these questions.”

Olander is writing the series with Brian C. Murray, director for economic analysis at the Nicholas Institute. They have posted three briefs thus far:

• “Offsets: An Important Piece of the Climate Policy Puzzle” (August 2008). This short introductory brief is intended to provide readers with an overview of the substantial benefits that can come from using offsets to incorporate outside-the-cap mitigation and the very real remaining concerns. To read it, go to www.nicholasinstitute.duke.edu/mitigationbeyondcap/offsetseries1.

• “Treatment of Early Agricultural and Forestry Actors in a Federal Cap-and-Trade” (October 2008). Treatment of early actors is a critical and at times contentious part of the climate policy discussion. Fairness suggests that parties who have been good actors thus far not be penalized for their good deeds by being left out of the opportunity for compensation in a compliance regime. But efficiency and system integrity require that payment be focused on activities and emission reductions incremental to those already being achieved. This 12-page brief addresses this conflict and examines four considerations policymakers could use to frame their discussions: 1) What will qualify as an early action? 2) Can early actions be eligible for credits after the compliance period begins? 3) Can early actions be credited for pre-compliance activity? 4) Are there ways to compensate for non-additional GHG mitigation activities? You can read the brief at nicholasinstitute.duke.edu/mitigationbeyondcap/offsetseries2.

• “Addressing Impermanence Risk and Liability in Agriculture, Land Use Change, and Forest Carbon Projects” (October 2008). Greenhouse gas mitigation projects in agriculture, land use change, and forestry (AgLUCF) achieve GHG reductions that can offset emissions elsewhere in the system. But there can be a catch. Carbon stored in soils and vegetation is subject to re-emission, or “reversal,” back into the atmosphere as the result of natural risks such as fires and floods, man-made risks arising from the ease with which a land manager can revert to conventional emitting practices, or contractual risks if projects have a finite time span and the mitigation contract between seller (the farmer or landowner) and buyer (a party wishing to buy credits to offset its GHG emissions elsewhere) expires with no further incentive for keeping the carbon stored. This 14-page brief examines impermanence in AgLUCF carbon projects and reviews options for managing the risk. To read the brief, go to nicholasinstitute.duke.edu/climate/policydesign/offsetseries3.

Additional briefs will be posted on the series’ Web page in coming months, as they are completed.