[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/117927.html
   My bibliography  Save this paper

Avoiding leakage from nature-based offsets by design

Author

Listed:
  • Filewod, Ben
  • McCarney, Geoff
Abstract
Leaky offsets are old news. As the world embraces nature-based solutions as a core strategy for critical near-term climate change mitigation, transactions of nature-based offsets in both compliance and voluntary markets reflect an underlying assumption that current approaches to managing leakage at the project level are working. We argue that this is not the case: leading third-party certification standards appear to vastly understate leakage compared to the research literature, and the tools available for project-level crediting cannot deliver the accuracy needed in practice. We propose an alternative, conservative, approach for avoiding leakage by design, based on understanding the ‘duality’ between additionality and leakage in a system at equilibrium. We then identify three principles that offset developers, certifiers, and consumers should implement at the project level now to improve the credibility of nature-based offset markets, while also allowing for increasing ambition and investment in nature-based solutions.

Suggested Citation

  • Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117927, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:117927
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/117927/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicolas Kreibich & Lukas Hermwille, 2021. "Caught in between: credibility and feasibility of the voluntary carbon market post-2020," Climate Policy, Taylor & Francis Journals, vol. 21(7), pages 939-957, August.
    2. Krister Andersson & Kenneth R. Richards, 2001. "Implementing an international carbon sequestration program: can the leaky sink be fixed?," Climate Policy, Taylor & Francis Journals, vol. 1(2), pages 173-188, June.
    3. Calel, Raphael & Colmer, Jonathan & Dechezlepretre, Antoine & Glachant, Matthieu, 2021. "Do carbon offsets offset carbon?," LSE Research Online Documents on Economics 113849, London School of Economics and Political Science, LSE Library.
    4. Carter, Patrick & Van de Sijpe, Nicolas & Calel, Raphael, 2021. "The elusive quest for additionality," World Development, Elsevier, vol. 141(C).
    5. Gan, Jianbang & McCarl, Bruce A., 2007. "Measuring transnational leakage of forest conservation," Ecological Economics, Elsevier, vol. 64(2), pages 423-432, December.
    6. Jennifer M. Alix-Garcia & Elizabeth N. Shapiro & Katharine R. E. Sims, 2012. "Forest Conservation and Slippage: Evidence from Mexico’s National Payments for Ecosystem Services Program," Land Economics, University of Wisconsin Press, vol. 88(4), pages 613-638.
    7. Brian C. Murray & Bruce A. McCarl & Heng-Chi Lee, 2004. "Estimating Leakage from Forest Carbon Sequestration Programs," Land Economics, University of Wisconsin Press, vol. 80(1), pages 109-124.
    8. Gernot Wagner & David Anthoff & Maureen Cropper & Simon Dietz & Kenneth T. Gillingham & Ben Groom & J. Paul Kelleher & Frances C. Moore & James H. Stock, 2021. "Eight priorities for calculating the social cost of carbon," Nature, Nature, vol. 590(7847), pages 548-550, February.
    9. Michael J. Roberts & Shawn Bucholz, 2006. "Slippage in the Conservation Reserve Program or Spurious Correlation? A Rejoinder," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 512-514.
    10. Nepal, Prakash & Ince, Peter J. & Skog, Kenneth E. & Chang, Sun J., 2013. "Forest carbon benefits, costs and leakage effects of carbon reserve scenarios in the United States," Journal of Forest Economics, Elsevier, vol. 19(3), pages 286-306.
    11. Michael J. Roberts & Wolfram Schlenker, 2013. "Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate," American Economic Review, American Economic Association, vol. 103(6), pages 2265-2295, October.
    12. Delacote, Philippe & Robinson, Elizabeth J.Z. & Roussel, Sébastien, 2016. "Deforestation, leakage and avoided deforestation policies: A spatial analysis," Resource and Energy Economics, Elsevier, vol. 45(C), pages 192-210.
    13. Kallio, A. Maarit I. & Solberg, Birger & Käär, Liisa & Päivinen, Risto, 2018. "Economic impacts of setting reference levels for the forest carbon sinks in the EU on the European forest sector," Forest Policy and Economics, Elsevier, vol. 92(C), pages 193-201.
    14. Giacomo Grassi & Jo House & Frank Dentener & Sandro Federici & Michel den Elzen & Jim Penman, 2017. "The key role of forests in meeting climate targets requires science for credible mitigation," Nature Climate Change, Nature, vol. 7(3), pages 220-226, March.
    15. Bosello, Francesco & Eboli, Fabio & Parrado, Ramiro & Rosa, Renato, 2010. "REDD in the Carbon Market: A General Equilibrium Analysis," Sustainable Development Papers 98100, Fondazione Eni Enrico Mattei (FEEM).
    16. Juan Robalino & Alexander Pfaff & Laura Villalobos, 2017. "Heterogeneous Local Spillovers from Protected Areas in Costa Rica," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(3), pages 795-820.
    17. N. Wear, David & Murray, Brian C., 2004. "Federal timber restrictions, interregional spillovers, and the impact on US softwood markets," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 307-330, March.
    18. Wytze van der Gaast & Richard Sikkema & Moriz Vohrer, 2018. "The contribution of forest carbon credit projects to addressing the climate change challenge," Climate Policy, Taylor & Francis Journals, vol. 18(1), pages 42-48, January.
    19. JunJie Wu, 2000. "Slippage Effects of the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 979-992.
    20. Song, Nianfu & Chang, Sun Joseph & Aguilar, Francisco X., 2011. "U.S. softwood lumber demand and supply estimation using cointegration in dynamic equations," Journal of Forest Economics, Elsevier, vol. 17(1), pages 19-33, January.
    21. Fanny Moffette & Holly K. Gibbs, 2021. "Agricultural Displacement and Deforestation Leakage in the Brazilian Legal Amazon," Land Economics, University of Wisconsin Press, vol. 97(1), pages 155-179.
    22. Elías Cisneros & Sophie Lian Zhou & Jan Börner, 2015. "Naming and Shaming for Conservation: Evidence from the Brazilian Amazon," PLOS ONE, Public Library of Science, vol. 10(9), pages 1-24, September.
    23. Onno Kuik, 2014. "REDD+ and international leakage via food and timber markets: a CGE analysis," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(6), pages 641-655, August.
    24. Charlotte Streck, 2021. "REDD+ and leakage: debunking myths and promoting integrated solutions," Climate Policy, Taylor & Francis Journals, vol. 21(6), pages 843-852, July.
    25. JunJie Wu, 2005. "Slippage Effects of the Conservation Reserve Program: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 251-254.
    26. Michael J. Roberts & Shawn Bucholtz, 2005. "Slippage in the Conservation Reserve Program or Spurious Correlation? A Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 244-250.
    27. Kenneth Richards & Krister Andersson, 2001. "The leaky sink: persistent obstacles to a forest carbon sequestration program based on individual projects," Climate Policy, Taylor & Francis Journals, vol. 1(1), pages 41-54, March.
    28. Lea Fortmann & Brent Sohngen & Douglas Southgate, 2017. "Assessing the Role of Group Heterogeneity in Community Forest Concessions in Guatemala’s Maya Biosphere Reserve," Land Economics, University of Wisconsin Press, vol. 93(3), pages 503-526.
    29. Kim, Man-Keun & Peralta, Denis & McCarl, Bruce A., 2014. "Land-based greenhouse gas emission offset and leakage discounting," Ecological Economics, Elsevier, vol. 105(C), pages 265-273.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117928, London School of Economics and Political Science, LSE Library.
    2. Pan, Wenqi & Kim, Man-Keun & Ning, Zhuo & Yang, Hongqiang, 2020. "Carbon leakage in energy/forest sectors and climate policy implications using meta-analysis," Forest Policy and Economics, Elsevier, vol. 115(C).
    3. Jennifer M. Alix-Garcia & Elizabeth N. Shapiro & Katharine R. E. Sims, 2012. "Forest Conservation and Slippage: Evidence from Mexico’s National Payments for Ecosystem Services Program," Land Economics, University of Wisconsin Press, vol. 88(4), pages 613-638.
    4. Alix-Garcia, Jennifer & Wolff, Hendrik, 2014. "Payment for Ecosystem Services from Forests," IZA Discussion Papers 8179, Institute of Labor Economics (IZA).
    5. Delacote, Philippe & Robinson, Elizabeth J.Z. & Roussel, Sébastien, 2016. "Deforestation, leakage and avoided deforestation policies: A spatial analysis," Resource and Energy Economics, Elsevier, vol. 45(C), pages 192-210.
    6. García, Jorge H. & Orlov, Anton & Aaheim, Asbjørn, 2018. "Negative leakage: The key role of forest management regimes," Journal of Forest Economics, Elsevier, vol. 33(C), pages 8-13.
    7. Alexander Pfaff & Juan Robalino, 2017. "Spillovers from Conservation Programs," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 299-315, October.
    8. Miguel Cantillo, 2015. "Dynamic Investment with Adverse Selection and Moral Hazard," Working Papers 201501, Universidad de Costa Rica, revised Mar 2015.
    9. Gwenolé Le Velly & Alexandre Sauquet & Sergio Cortina-Villar, 2017. "PES Impact and Leakages over Several Cohorts: The Case of the PSA-H in Yucatan, Mexico," Land Economics, University of Wisconsin Press, vol. 93(2), pages 230-257.
    10. B Kelsey Jack & Carolyn Kousky & Katharine R E Sims, 2007. "Lessons Relearned: Can Previous Research on Incentive-Based Mechanisms Point the Way for Payments for Ecosystem Services?," CID Working Papers 15, Center for International Development at Harvard University.
    11. Onno Kuik, 2014. "REDD+ and international leakage via food and timber markets: a CGE analysis," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(6), pages 641-655, August.
    12. Andrew Manale & Cynthia Morgan & Glenn Sheriff & David Simpson, 2011. "Offset markets for nutrient and sediment discharges in the Chesapeake Bay Watershed: Policy tradeoffs and potential steps forward," NCEE Working Paper Series 201105, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2011.
    13. Kim, Man-Keun & Peralta, Denis & McCarl, Bruce A., 2014. "Land-based greenhouse gas emission offset and leakage discounting," Ecological Economics, Elsevier, vol. 105(C), pages 265-273.
    14. David A. Fleming, 2014. "Slippage effects of land-based policies: Evaluating the Conservation Reserve Program using satellite imagery," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 167-178, November.
    15. Stibniati Atmadja & Louis Verchot, 2012. "A review of the state of research, policies and strategies in addressing leakage from reducing emissions from deforestation and forest degradation (REDD+)," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(3), pages 311-336, March.
    16. Juan Robalino & Alexander Pfaff & Laura Villalobos, 2015. "Deforestation spillovers from Costa Rican protected areas," Working Papers 201502, Universidad de Costa Rica, revised Sep 2015.
    17. Ekaterina Vorotnikova & Serhat Asci & James L. Seale, 2018. "Joint production, land allocation, and the effects of the production flexibility program," Empirical Economics, Springer, vol. 55(3), pages 1121-1143, November.
    18. Assogba, Noel Perceval & Zhang, Daowei, 2022. "The conservation reserve program and timber prices in the southern United States," Forest Policy and Economics, Elsevier, vol. 140(C).
    19. Li, Lili & Zhang, Daowei, 2024. "Forest carbon offset protocols in compliance carbon markets," Forest Policy and Economics, Elsevier, vol. 165(C).
    20. Huiying Ye & Qi Zhang & Xunzhang Pan & Arash Farnoosh, 2020. "Market-induced carbon leakage in China’s certified emission reduction projects," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(6), pages 987-1012, August.

    More about this item

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:117927. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.