Analysis of Advantages and Disadvantages of Offset Approaches in Selected Sectors

  • Project no.251954
  • Duration 09/2019 - 06/2021

Offset approaches such as the Kyoto Protocol's Clean Development Mechanism and Joint Implementation allow governments and enterprises to fulfil a part of their climate change mitigation obligation abroad by using imported mitigation outcomes for the attainment of their mitigation targets. Offset approaches are associated with potentials and risks: they allow to maximise flexibility on the demand side by reducing the costs for pledge attainment. Under certain circumstances, however, offset approaches can also work against domestic mitigation efforts, for instance if the costs of offset use reduce the incentive to implement domestic climate action.

In light of these and other effects of offset use this project explores how this mitigation instrument can be made future-proof given that offset approaches will continue being part of the international climate policy and also the Paris Agreement – scheduled to become operational by 2020 – envisages the use of offsets under its Article 6. Building on the experiences made so far with offset mechanisms, this project asks which framework conditions are required and how offset approaches should be designed for being successfully applied in selected sectors post-2020. The research team explores these questions by gathering the experiences made so far with offset approaches and translating them to the new framework conditions of the Paris Agreement.

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