Improving citizen responsibility in the North and its consequences for the South Prof. dr. Marjan Peeters Universiteit Maastricht The Netherlands

Booming business : consumers buying carbon offsets Advertisements encourage citizens to take responsibility to reduce their carbon footprint Air travel, theater-going, card purchases... Emissions can be compensated by `carbon offsets’ Like the air travel to this conference....

Let’s go carbon neutral.... By reducing one’s emissions By compensating ‘unavoidable emissions’ through carbon offsets Carbon neutrality as an option for governments, industries, and citizens As an additional option to the primary responsibility to reduce emissions by themselves

Core question There is a profit for the providers, and so there is a need for control One can imagine cheating with: - counting the carbon load - the content of the carbon offer - the execution of the carbon offer However, is the consumer able to review the the provider’s behaviour, and What should be the role of the government?

Concerns of the South Compensation of greenhouse gas emissions will be mostly done in developing countries Is it beneficial or not? Depends on specific project characteristics Which are not necessarily CDM projects (with the basic requirement of ‘sustainable development’)

Position Government has a twofold task regarding the carbon offsets: -To ensure a fair and effective consumer law -To ensure that the concerns of the developing countries will be protected

Moreover, governmental involvement is needed ► to ensure trust and integrity (to make the market work) ► to ensure that compensation is just one (last resort)option How to be ensured? By strengthening consumer law, or by governmental (regulatory) involvement?

In case of an unregulated and voluntary carbon offset market: Providers are free to choose what they offer, citizens are free to buy what they want Consumers can however hardly: - assess the content of the offer; - investigate and inspect compliance

Borders.... National governments and frameworks, but a transboundary market Diverging approaches among EU states No international legal agreement > Head of the UNFCCC secretariat has put on the wishlist that the UNFCCC would provide a legal framework

Comparison of national approaches to the voluntary offset market UK (common law, market based culture) Netherlands (civil law, more government oriented culture)

UK Government initiated a Code of Best Practices for Offset Providers Impressive (private) legal framework In addition: interesting opinions in the Environment Committee, like a compulsory choice option for consumers

Code of Best Practice for Offset Providers A legal framework with procedures, including compliance Accreditation Body Standard: CDM, but providers may offer other possibilities which will be assessed Providers pay for accreditation, so they pay the service of credibility

Netherlands Government leaves credibility arrangements to the private sector, with subsidies to set up some accounting procedures But no harmonised scheme with an Accreditation Body: So, a less coherent approach, still a fragmented market It is yet to be examined whether those private mechanisms and enforcement of consumer law may ensure credibility

Trade off A harmonised accreditation scheme means price increase of credits Extra money doesn’t go to the developing world, but to accreditation and inspection Less investments in developing countries, and less innovative and small-scale projects ? Is this the price to be paid? Tend to answer: yes. However, consumers are still free to buy offsets outside the accreditation scheme.

Some related aspects Government as a market player Congruence with climate change regulations

Side effect of governmental behavior International and national governments announce to go carbon neutral (UN, The Hague.....) The impact of voluntary offsets by governmental organisations might be hugh Consumers might expect that the government (controlled by parliament) chooses the right offsets, so might follow the government

Congruence of carbon offsets with other policies ? Air travel tax in the Netherlands Air travel emissions trading in the EU Consequences: - Citizens won’t buy offsets anymore? - However, should offsets be preferred from a point of view from developing countries?

For the time being, what could a European citizen willing to offset carbon emissions do? To register for the EU greenhouse gas allowance trading scheme, and to buy allowances from industries or from the government Direct effect: fewer emissions in EU (if the consumer would have caused emissions anyway) However, no direct investment in developing country

Future regulatory options to encourage offsets (as an option additional to the primary option of reducing emissions) 1.Compulsory labelling of the carbon load of products and services? 2.Compulsory choice option? 3.Compulsory compensation?