Additionality

What is Additionality?

Additionality is a core principle in carbon credit projects, requiring proof that the emission reductions claimed by the project would not have occurred without its intervention. In other words, additionality helps determine whether a project genuinely contributes to the reduction of greenhouse gases beyond what would have naturally occurred.

Why is Additionality Important?

Without additionality, the purchase of carbon credits could end up funding projects whose proposed impact would have happened in any case, failing to achieve real-world emission reductions. A project that is unable to prove additionality can pose risks of greenwashing, resulting in an ineffective climate strategy for those who invested in it. This is why additionality is essential in order to uphold the credibility and effectiveness of carbon credits, along with leakage and permanence.

Project overview for determining the quality of carbon credits — Additionality, Permanence, and Leakage all need to be evaluated together in order to determine the quality of a carbon credit project.

Measuring Additionality

Additionality is calculated by including baseline scenarios that determine the emissions that would have been emitted if the project was not implemented. Once the baseline has been determined, the credits are calculated by subtracting the project emissions to the baseline emissions.

A baseline represents a ‘business-as-usual’ scenario that is used to estimate expected emissions in the absence of a project. Credits are issued based on the difference between project and baseline emissions (accounting for quantification uncertainties and leakage). Baselines are used to measure additionality when performing an initial project feasibility study and later to measure the project’s impact outcome

In addition to baseline emissions, the following variables are also evaluated when measuring additionality:

Financial Viability: Evaluating whether the project would be financially viable without the revenue from carbon credit sales.
Policy and Regulation: Understanding if the project is subject to any regulatory implications or policies that would require the activities to be carried out in any case.
Common Practice Analysis: Assessing whether similar practices are already taking place in the region, which would suggest that the project could proceed without carbon credit sales.
Over-Crediting Risk: Looking into the project's issuance volume and ensuring that the project doesn't claim to deliver more credits than the actual emission reductions it achieves.

Additionality: Not a Binary Condition

Additionality is not a binary 'yes or no' condition, contrary to common misconception. Instead, it rather exists on a spectrum ranging from 'very unlikely' to 'very likely' to be additional. A comprehensive evaluation of the project's entire context and potential impact is necessary to accurately determine its position on this spectrum.

Implications for Sustainability Leaders

For sustainability leaders embarking on Net Zero paths, understanding and applying the concept of additionality is a must. It requires a keen eye for scrutinising project details and a deep understanding of the varied factors that contribute to a project's additionality.