Additionality is defined as “the project-based GHG emission reductions must be beyond what would have happened anyway or in a business-as-usual scenario”. To discuss additionality we need to define subsidies, offsets, baseline and ‘business as usual’. The following text combines ideas from several key sources (Gillenwater 2012, UNFCCC CDM Methodological Tool Version 7 2017, Claassen 2014).
A subsidy is intended to influence behavior but does not guarantee that a practice would not have occurred without the subsidy. An offset is intended to reduce GHG by some mechanism in one location to make up for GHG emissions elsewhere. An advantage of offsets is that markets can be used to help implement the most cost-effective reduction of GHG emissions. Offsets allow for trading credits to achieve compliance in emission limits. However, for an offset to achieve its purpose, in must be Extra, Surplus, or Additional – in other words, it must be done specifically for the purpose of reducing GHG emissions that would not have happened anyway. This ‘extra/surplus/additional’ value must be relative to a baseline or reference scenario and it must account for the differences in regulations and baseline requirements across sectors (for example, agriculture vs. electric) to ensure a net reduction from the system as a whole.
Developing a meaningful baseline or reference scenario is challenging for several reasons. First, a change in behavior in the future can happen for all kinds of reasons, not just the policy being evaluated (for example, a government policy could provide cost-share to afforest abandoned agricultural land. Alternatively, a 3rd party investor might approach that same landowner to lease the abandoned agricultural land to grown short rotation willow for a local bioenergy plant). Second, actors may provide misinformation in order to qualify or increase the benefits (gaming the system, free riders). Third, actors that have already begun a practice may not get credit. Fourth, a single behavior may be influenced by multiple factors, many of which are independent of the specific policy initiative. For example, a farmer might install a manure cover and flare system on a liquid storage unit to reduce odors specifically to improve neighbor relations, independent of the GHG mitigation benefit. Fifth, if a historical baseline is used, such as the year 1990, it is not possible to determine changes that would have happened anyway from changes that may have occurred in response to a GHG policy. Sixth, if a future business-as-usual scenario is used, it must make many assumptions about future behavior, land use, and economic conditions.
A 1990 baseline is used by the national reporting under the United Nations Framework Climate Convention (UNFCC) as well as NYS’s recently enacted Climate Leadership and Community Protection Act (CLCPA). In such cases, any changes in GHG emissions are compared to the 1990 baseline. However, comparison to such a historical year baseline does not distinguish between reductions that would have occurred without any policy or management interventions from those that would not. For example, since 1990 there have been increases in the efficiency of both crop and livestock production, so that fewer GHG emissions occur for a given amount of food produced. However, these changes are due to market forces and ongoing efforts by farmers and others to improve production practices and improve economic returns, not to reduce GHG emissions. Thus, they happened anyway, not due to any GHG policy or management.
In this way, a practice that improves profitability may not be considered additional, since it might happen anyway. That is, a farm might implement a practice because it makes good financial sense through market-based mechanisms and therefore does not need State support to implement. Many of the GHG mitigation practices outlined in this report are now being done by some landowners/farmers in the State for reasons other than GHG mitigation. Such practices include improved N-use efficiency or managing woodlands/forests for high quality timber production in the future. The State could incentivize these practices for rural economic development and conservation purposes. The column “Achievable” in Table 3 is intended to illustrate the financial elements of implementing a practice in the current context.
New York has a long history of providing various forms of support to landowners to improve rural livelihoods, ensure healthy products, and protect air and water quality. To increase greenhouse gas mitigation, NYS could facilitate peer-to-peer training – taking advantage of the small percentage of farms that have already implemented a practice. Support for peer-to-peer training may be all that is required to achieve wider adoption of the practice throughout the state. NYS could also consider bundling or stacking multiple benefits together. However, when GHG benefits are bundled with other benefits, it can be much harder to determine that they are additional since the main benefit may be for water quality or some other purpose. In such cases, GHG benefits might best be viewed as co-benefits to some other main benefit. For this reason, in this report, the first column labeled “Services” in Table 3 provides a list of co-benefits associated with practices to help guide these kinds of bundled initiatives.
Many factors make it difficult to define agricultural practices as additional in NYS and elsewhere. For example, New York has supported farmer adoption of many Best Management Practices to achieve water quality improvements. Such support has included education and outreach, incentives, and cost-sharing. These practices have had both positive and negative impacts on GHG emissions. Below are 2 examples illustrating the complexity for determining the Additionality.
Example 1: The “Trees for Tributaries” program is designed to improve water quality but may also have reduced net GHG emissions by sequestering carbon in trees. However, if it removes agricultural land from production, it may also cause land elsewhere to be converted to agricultural production, which may cause GHG emissions elsewhere due to indirect land use change (detrimental leakage). Plus, because riparian buffers are already being supported to improve water quality, the concomitant GHG mitigation from the growing trees may not be considered ‘additional’ GHG mitigation.
Example 2: In recent decades, CAFO regulations to improve water quality have increased the number of long-term liquid manure storage units in NYS doubling the manure-based GHG emissions from the dairy herd. Covering the storage unit and flaring methane from currently uncovered liquid storage greatly reduces GHG emissions. There are benefits to simply covering liquid manure storage units including odor control, reduced rainwater hauling costs, and reduced SPDES overflow violations. If covered for these reasons, adding a flare and meter would likely be considered additional if implemented as a GHG mitigation strategy. However, if odor control, rainwater hauling, and SPDES violations are not of particular concern for a farm and would not be adopted with a GHG policy, the entire manure cover+flare system could be considered additional. If however, one installed an Anaerobic Digester System (ADS) to generate electricity with the goal of maximizing methane production for maximal energy generation, this increased methane production and destruction should not be considered ‘additional’ GHG mitigation, because it is extra methane being produced to create electricity. This is important because if the digester system is not carefully designed and monitored for leaks and for emissions from digestate the net GHG emissions could actually increase rather than decrease compared to a baseline of a liquid storage unit and a baseline of GHG from current electricity production.
A rigorous definition of ‘additionality’ should be applied to any policy lever where a credit is given for supplying a public good or service to ‘offset’ a harm caused elsewhere. For example, if carbon sequestration in newly planted forests is to be used to offset GHG emissions from fossil fuel combustion for electricity generation, then the carbon sequestration should meet a rigorous definition of additionality. This report does not to specify whether or not a practice is “Additional” because it requires too many assumptions about the baseline and what constitutes “business as usual”. Defining and quantifying additionality is fundamentally a policy decision. At this time, it is unclear how NYS will define additionality for agricultural GHG mitigation practices. Additionality is meant to be a companion to assist in the ‘credibility’ of an offset, ensuring the mitigation is a surplus from one sector making it a Real reduction. Evaluation of additionality is also important for conserving the limited funds available to implement GHG mitigation strategies that quantifiably deliver the publicly funded good of mitigating climate change.
