14 December 2006 NEW INQUIRY

14 December 2006 NEW INQUIRY

The Voluntary Carbon Offset Market

The Environmental Audit Committee (EAC) today launches an inquiry into the voluntary carbon offset market. Over the last few years, there has been a considerable growth in this market as awareness of climate change has increased and public and private bodies, as well as individuals, have sought to reduce their overall carbon footprint.

The carbon offset market provides companies, public bodies and individuals with the opportunity to purchase credits generated from projects that reduce the amount of greenhouse gases entering the atmosphere. Such projects include schemes for afforestation, energy efficiency or for the cleaning up of carbon-intensive industries in the developing - or developed - world.

However, there is growing concern about the carbon offset market: while it is clearly a growing area of enterprise and a legitimate means of financing carbon reductions through various projects across the world, it is not always seen to be robustly regulated. In terms of how the market and its funded projects operate, particular concerns surround the issues of proving additionality, of verification and monitoring, of the permanence of the offset, of possible leakage from offset projects and the potential for double-counting. In terms of other effects of offsetting, some commentators have suggested that the practice allows prosperous Western nations to continue to enjoy carbon-intensive lifestyles at little extra cost while the most immediate effects of unabated climate change will be experienced in the poorer countries of the world.

The Committee invites organisations and members of the public to submit memoranda setting out their views on this inquiry. Some particular issues on which the Committee would welcome comments are set out overleaf, although respondents are free to comment on any issues which they consider relevant.

Written evidence should be sent to the Committee by Friday 19 January 2007, by e-mail to [email protected], and in Word format. A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages. For further information on the this inquiry, please telephone 020-7219-0248.

Some Inquiry Issues

Ought there to be a compulsory UK or European accreditation scheme for carbon offset projects or companies? If so, how should this operate?

Should offsetting become mandatory for some of the more carbon-intensive activities, such as flying?

Is there enough clarity within the offset market to allow customers to make informed choices based upon robust information about different schemes at different prices?

Many offset projects involve afforestation or reforestation. Is the science sufficiently coherent in this area accurately to assess overall long-term carbon (or other GHG) gains and losses from such projects?

Is there sufficient data available to guarantee accurate amounts of carbon or other GHG mitigation in the sorts of schemes which offset projects finance?

What impact will the voluntary carbon offset market have on the compliance market if the former continues to grow as steadily as it has done over the last few years?

What evidence is there to show that offsetting helps to change the carbon behaviour of the customer?

To what extent are the schemes and projects funded by offset companies more broadly sustainable, in an environmental, social or economic sense?

Notes for Editors

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