cover image: Avoiding Leakage from Nature-Based Offsets by Design

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Avoiding Leakage from Nature-Based Offsets by Design

13 Jan 2023

For example, Richards and Andersson62:53 argued that both theoretical and practical challenges prevent the accurate measurement of leakage at the project level, concluding that ”either the reliability of project analysis will be low or the costs of analysis will be high, and quite possibly both”. [...] The adjustment of the economic subsystem is captured by the substitutability of timber from the reserved and non- reserved area 𝛾 ∈ [0,1], the price elasticity of supply 𝑒 (the percent change in supply caused by a percent change in price) and the price elasticity of demand 𝐸 (the percent change in demand caused by a percent change in price). [...] The standard of certainty for avoiding market leakage risk should be set by the nature of the substituted action When nature-based offsets rely on additionality in markets, our review (sections 2 and 3) demonstrates fundamental uncertainty in estimating the potential for market leakage risk – but that it is likely high. [...] Access to a lower cost pool of risker offsets could be beneficial in specific circumstances: for example, in cases where a low carbon transition strategy involves some probability of failure (provided that risk is proportional to the leakage risk in the offset), or as part of a portfolio of measures that provide other sustainability co-benefits (provided the leakage risk is properly and transparen. [...] Our first and second principles depend on the use to which offsets are put and should be applied by the buyers 12 of nature-based offsets and the designers of offset schemes.

Authors

Benjamin Filewod

Pages
25
Published in
Canada

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