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Buying and Cancelling Allowances as an Alternative to Offsets for the Voluntary Market: A Preliminary Review of Issues and Options

Listed author(s):
  • Anja Kollmuss

    (Stockholm Environment Institute)

  • Michael Lazarus

    (Stockholm Environment Institute)

Registered author(s):

    In recent years, businesses, local governments and individuals have set goals for reducing their emissions of greenhouse gases. In addition to directly reducing their own emissions, many of these entities have purchased carbon offsets to help achieve their mitigation goals. Yet establishing offset quality can be difficult, due to issues such as additionality, measurement, leakage, permanence, and verification. This paper explores scenarios under which, as an alternative to offsets, voluntary buyers could instead buy and cancel allowances from compliance markets. The purchase and cancellation of allowances reduces the available allowances in a cap-and-trade system, “tightening the cap” and, in principle, reducing the emissions that can be produced by covered sources. By this logic, purchasing and cancelling an allowance compels covered sources to achieve additional mitigation. Opportunities for voluntary buyers to purchase and cancel tradable compliance units currently exist in several markets, but in small quantities. If the practice of cancelling allowances remains limited to individuals and voluntary corporate buyers, it is likely to remain small and is unlikely to send a strong price signal. In the medium and long-term this might change if large numbers of sub-national actors came into play and chose to cancel allowances. Depuis quelques années, des entreprises, des collectivités locales et des particuliers s’attachent à ramener leurs émissions de gaz à effet de serre à un niveau donné. Indépendamment de la réduction directe des quantités qu’elles émettent, beaucoup de ces entités ont acquis des crédits de compensation carbone pour contribuer à la réalisation de leurs objectifs d’atténuation. Toutefois, la réalité de la compensation peut être difficile à établir, compte tenu des problèmes d’additionnalité, de mesure, de fuite, de permanence et de vérification. Ce document porte sur des scénarios selon lesquels, à la place des formules de compensation, les acteurs volontaires pourraient acheter des quotas sur le marché réglementé du carbone puis les annuler. L’achat et l’annulation de quotas reviennent à diminuer les quotas disponibles dans un système de plafonnement et d’échange, puisqu’il s’agit d’« abaisser le plafond » et, en principe, de réduire les émissions susceptibles d’être produites par les sources prises en compte. Logiquement, l’achat et l’annulation d’un quota obligent les sources en question à aller plus loin dans l’atténuation. Des possibilités d’achat et d’annulation d’unités négociables s’offrent actuellement aux acquéreurs volontaires sur plusieurs marchés, mais les quantités sont peu importantes. Si la pratique de l’annulation de quotas demeure limitée à des acteurs isolés et à des entreprises volontaires, elle n’a guère de chances d’envoyer un signal de prix fort. À moyen et long termes, la situation pourra évoluer si un grand nombre de collectivités infranationales entrent en jeu et décident d’annuler des quotas.

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    Paper provided by OECD Publishing in its series OECD Environment Working Papers with number 21.

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    Date of creation: 04 Aug 2010
    Handle: RePEc:oec:envaaa:21-en
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