Coase-Sandor Working Paper Series in Law and Economics

Publication Date

2024

Abstract

Carbon offsets are widely criticized for lacking additionality. The public debate, how- ever, has failed to recognize that the problem of additionality goes far beyond offsets. It arises any time the government subsidizes an activity. Programs with longer histories than offsets and far more money at stake offer valuable lessons for managing lack of additionality in offsets. The article sets out the current efforts to prove offset additionality, explains why major gov- ernment programs present comparable additionality challenges, and show why other programs’ problems of additionality are perceived as significantly different than those for offsets. We examine the toolkit used to address additionality in subsidies and show how this can be use- fully applied to offsets. Offsets are central to many climate pledges, so it is critically important they be credible. But the challenge of managing offset additionality need not be understood in isolation. It is, in fact, a common problem with tested solutions.

Number

1023

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