Energy efficiency offset projects under the Alberta-based Offset Credit System: a protocol and programme-level policy assessment

Abstract

Under the Canadian Province of Alberta's Climate Change Strategy, offset credits are one of four compliance mechanisms that large greenhouse gas (GHG) emitters can use to meet their mandatory emissions intensity reduction target. Although offset credit purchases account for 55% of all GHG reductions by regulated emitters, only one energy efficiency offset project has been registered and verified in the Alberta-based Offset Credit System. Barriers to energy efficiency offset project development include: lack of historical energy monitoring, onerous project measurement requirements, complications with establishing ownership and limited offset volume creation. It is possible to overcome these barriers while maintaining the integrity of an emission reduction claim. By allowing for overly conservative quantification methods, the precision, frequency and duration of measurement and monitoring could be reduced. Alternative measuring and monitoring techniques include: data extrapolation, utilization of equipment output ratings and conservative calibration of models. While these alternative techniques would increase flexibility with regard to data collection requirements, such protocol changes would not result in increased project development until Alberta Environment's programme accuracy requirements are addressed. Faced with the administrative burden of an increasingly complex offset system, as well as criticism from the provincial Auditor General, Alberta Environment has upheld the offset programme's accuracy requirements and has pursued the implementation of policies that will create further barriers to the development of energy efficiency offset projects.

A review of market‐based climate change regulation in Alberta's oil and gas sector

“…Two major events have transformed the volume of credits and dominant project types in the offset market: The first event is new offset program rules announced in 2010. The rules state that (1) all offset projects are to be verified according to a reasonable level of assurance rather than a limited level of assurance and (2) project developers will no longer be allowed to create offsets for early‐action emission reduction activities going back to 2002 (i.e., only go‐forward crediting for all new protocols will be allowed); and (3) accreditation of third‐party verifiers will become mandatory . These changes serve to increase the credibility of the emission reduction claims, but also create barriers to the development of new offset supply.…”

Navigating Canada's greenhouse gas policy landscape: a comparison of carbon market mechanisms in the oil and gas sector

“…A GHG mitigation programme often stipulates unique approaches for dealing with baseline adjustments, data measurement and tracking, accuracy requirements, and independent verification (Efficiency Valuation Organization, 2010). Under some GHG programmes excessive measurement and verification requirements can increase project monitoring costs making commercialization uneconomic (Tarnoczi, 2011). Verification can be done to a limited or reasonable level of assurance.…”