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Avoiding leakage from nature-based offsets by design

Filewod, Ben and McCarney, Geoff (2023) Avoiding leakage from nature-based offsets by design. Grantham Research Institute on Climate Change and the Environment Working Papers (390). Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science, London, UK.

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Leaky offsets are old news. As the world embraces nature-based solutions as a core strategy for critical near-term climate change mitigation, transactions of nature-based offsets in both compliance and voluntary markets reflect an underlying assumption that current approaches to managing leakage at the project level are working. We argue that this is not the case: leading third-party certification standards appear to vastly understate leakage compared to the research literature, and the tools available for project-level crediting cannot deliver the accuracy needed in practice. We propose an alternative, conservative, approach for avoiding leakage by design, based on understanding the ‘duality’ between additionality and leakage in a system at equilibrium. We then identify three principles that offset developers, certifiers, and consumers should implement at the project level now to improve the credibility of nature-based offset markets, while also allowing for increasing ambition and investment in nature-based solutions.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2023 The Authors
Divisions: Grantham Research Institute
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General
Date Deposited: 18 Jan 2023 10:45
Last Modified: 16 May 2024 12:26

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