Crowdsourced Climate Implications of Carbon Credits

Background

• Some municipalities have explored the option of selling their GHG reductions to raise revenue to secure future GHG reductions.
• The main issue with this approach is that once a municipality sells any carbon credits, those credits are not available to be applied to their GHG reductions (If this occurred, that would be double counting and a credibility issue).
• Most municipalities don’t have GHG reductions to sell (they need them for their GHG reduction targets).

Carbon Offsets vs. Carbon Credits

• Carbon offset: The purchase of some other entities’ GHG reductions towards your GHG reduction targets
• Carbon credit: The sale of GHG reductions from (in this case, a municipality) to another entity to help them achieve their GHG reductions.
• Once a carbon credit is sold, it can no longer be applied toward the seller’s GHG reduction targets.
• Therefore, if a municipality sells any GHG reductions, they cannot use those reductions towards their targets.

Crowdsourced Climate Implications Questions (Opportunities/Risks)

• Would a carbon budget need to be in place to know if municipalities have credits to sell?

Preliminary Climate Implications

Decision High-Level Questions: 

• Is this decision the only option available to meet the need/hoped-for outcome?
  • No, municipalities could choose not to sell their credits and instead apply them to their GHG reductions targets.

Mitigation High-Level Questions: 

• How does it support/undermine the Climate Action Mitigation Plan?  
  • Carbon credits undermine the Climate Action Mitigation Plan because they lose those reductions and cannot use them towards their GHG reduction targets.
• What potential consequences could arise from this action? Are we doing more for less?
  • The potential consequence of carbon credits is a municipality selling carbon credits and then not being able to use those credits toward their own GHG reduction targets.
• Does this address a legislative/regulatory responsibility? 
  • No, but there is the risk of double counting since there aren’t clear and transparent rules re reductions and GHG caps.
    

Adaptation High-Level Questions: 

• How does it support/undermine the Climate Action Adaptation Plan?
  • Carbon Offsets are a mitigation tool, not an adaptation tool.