Neighbourhood Osetting Program Background Paper

Neighbourhood Osetting allows individuals and/or organizations to purchase credits from neighbourhood scale environmental projects in order to reduce their own impact and transition to carbon neutrality. Neighbrouhood osetting projects could include tree planting, small scale renewable energy installations, improved forest management, low till agriculture, cogeneration (electricity and heat generation), or energy eciency upgrades and can be used to oset an individuals entire carbon footprint or to just focus on a specic activity (e.g., air travel).

Carbon Osetting

$ $ investment:
project

funds a high

project reduces CO2e emissions

O FFSETTERS

Your CO2e emissions

CO2e reductions become

Net zero CO2 emissions

How do they work?

Carbon Osetting creates credits for greenhouse gas reductions achieved by one party that can be purchased and used to compensate (oset) the emissions of another party. Carbon osets are typically measured in tonnes of CO2-equivalents (or CO2e) and are bought and sold through a number of international brokers, online retailers and trading platforms. Neighbourhood Osetting Programs are similar to traditional carbon osetting schemes, but are smaller in scale and typically have a greater involvement at the community level. If an individual or organisation or neighbourhood produces carbon osets and then sells them externally, they cannot claim to be carbon neutral (for the years covered by the oset). However, since carbon osets can be sold over multiple years, osets could be sold to help nance a technology for a given number of years (e.g. years 1-5) after which the neighbourhood group that built the project could claim neutrality (e.g. for years 6+). Used in such a manner, carbon osets could enable the transition to carbon neutrality.
Osetters www.osetters.ca

retires carbon credits on your behalf

Benets of Neighbourhood Osetting

Local economic impacts: Instead of sending money to fund distant projects, residents could invest their money locally in projects that directly impact their neighbourhood. This can result in more jobs and resources staying within the community as well as greater energy security and resiliency to changing energy prices. Local environmental and social impacts: depending on the location and type of project, neighbourhood osetting projects can also result in improved air quality, greater awareness and engagement in energy and environmental issues as well as reduced carbon footprint. Local oversight and management: projects could be managed locally using any of a number of dierent governance models, such as a co-operative of residents and businesses, or a neighbourhood steering committee. This helps to ensure that the project contributes to the neighbourhood prosperity. Initiating new projects: neighbourhood organizations can use a number of nancial tools, such as selling options on future credits. Stimulating a green economy: neighbourhood oset projects increase investment in innovative and/ or emerging green technologies or services, enable businesses to explore ways to allow their customers to reduce the environmental impact of their purchases, and allow consumers to show support for greener products or services.

Prepared by Grant Lowe, Jonathan Yazer, Karen Nasmith, Travis Allan for Project Neutrals Neighbourhood Summit, Evergreen Brickworks, June 9th.

Neighbourhood Osetting Program Background Paper

Challenges
Some of the challenges of establishing a neighbourhood osetting program include: Determining a viable and appropriate osetting project: availability of land and support from local residents and businesses are critical components of a successful neighbourhood osetting program. Certication costs: osets must be certied by a third party to ensure consistency within the carbon market, avoid double counting (cannot sell the same oset to multiple clients) and ensure additionality (credits must result from activities that are in addition to other activities that would have been done anyways). This process can be very expensive. Costs include project development, monitoring, verication and sale of credits. Discouraging individual change: some critics are concerned that osetting is counterproductive because it allows people to pay others to reduce greenhouse gas emissions on their behalf rather than reducing their own emissions. However, proponents argue osetting projects can allow us to decrease our global greenhouse gas emissions in the long run and can potentially mitigate the impacts of climate change.

Riverdale (left and center) and The Junction (right) are Project Neutrals pilot neighbourhoods

Individuals and businesses can purchase certied oset credits from projects to oset their emissions. The following are two examples of how osets can fund local projects: The City of Guelphs Eastview landll has a gas collection system that sends collected methane gas to an on-site electrical generation facility that is rated for approximately 2.75 MW of electricity at peak. Methane, a greenhouse gas, is destroyed by being consumed in the electrical generators engines. The City of Guelph is the rst known municipality in Ontario to have sold carbon oset credits to non- governmental entities. Their city council has directed that the proceeds generated by the transaction with the Greening Canada Fund be used to maintain and operate the existing landll gas collection system purchasing credits from this project helps to keep it going in the future. www.greenpoweraction.ca The Toronto District School Board (TDSB) and the Green Power Actions Greening Canada Fund (GCF) signed an agreement in 2010 under which TDSB will begin selling carbon credits to GCF credits created from results of the Boards eorts to make signicant reductions to its greenhouse gas emissions. Over ve years, this innovative transaction one of the rst of its

kind is expected to generate more than $1.7 million for TDSB. Since 2000, TDSB has invested more than $38 million in energy reduction projects that have produced an 18% reduction in greenhouse gas emissions. Those emission reductions have been measured and veried and will be sold through GCF, with the revenue reinvested in the Boards Environmental Legacy Fund Reserve to support future energy reduction projects. greenpoweraction.com Teng Hoi Conservation Organization is a non-prot organization that develops practical and participative environmental programmes with a strong emphasis on education and measurable results. Teng Hoi has established a Community Osetting program for schools, with each school agreeing to a cap on emissions generated by electricity consumption. Educational activities are then introduced that promote energy saving. Emissions savings are converted into Community Carbon Credits. Individuals or companies wishing to oset their own carbon emissions can then buy Community Carbon Credits. The osetting money saves carbon and helps promote environmental education. communityosetting.org

Osetting at the Neighbourhood Level

The Muskoka Envirocredits program is delivered by an alliance of non-prot organizations. Individuals and businesses can purchase envirocredits to promote watershed health while osetting carbon emissions through investment in watershed health initiatives (which includes the planting and tending of trees in the French-Severn Forest and acquisition and protection of forested areas and wetlands). These credits are not carbon osets and do not transfer the right to claim carbon neutrality or a reduction in greenhouse gas emissions to purchasers. muskokaheritage.org

Prepared by Grant Lowe, Jonathan Yazer, Karen Nasmith, Travis Allan for Project Neutrals Neighbourhood Summit, Evergreen Brickworks, June 9th.