How can we ensure that offsets result in an overall reduction in greenhouse gas emissions?
Because a capped entity can purchase an offset allowing it to emit greenhouse gases above its cap, the offset must represent a true reduction in emissions or increase in sequestration comparable to the entity’s increase in emissions.[14] Thus an offset must be a reduction that would not have otherwise occurred, which is known as additionality. There are a number of additionality tests that have been proposed and are being used in current markets to determine if an offset results in an overall reduction in greenhouse gases that would not have occurred without the offset activity.[15] Additionality tests include, but are not limited to, the following: Legal, regulatory, or institutional test. Offset project must reduce greenhouse gases emissions or increase sequestration beyond levels required by laws, regulations, industry standards, or guidance. Technology test. Offset projects must use new or “additional” technologies, those not used under business-as-usual circumstances. Barriers tes
