How does the Minister aim to ensure that Welsh carbon credits bought for the purpose of offsetting emissions outside of Wales are not double counted and used to offset Wales’s emissions?
We use the net Welsh emissions account (NWEA) to measure progress against Wales’s statutory emissions reduction targets and carbon budgets. The NWEA is calculated in three stages. Firstly we determine the amount of net Welsh emissions of greenhouse gases for the period. That is the amount of Welsh emissions of each gas, reduced by the amount of Welsh removals of each gas, which occur via land use, land use change and forestry activities in Wales. Secondly we subtract from the amount of net Welsh emissions any carbon units, or offsets, credited to the NWEA by the Welsh Ministers. Finally we add any carbon units debited to the NWEA. In our statutory framework a carbon unit is a credit obtainable under Article 12 of the Kyoto Protocol by implementing an emissions-reduction project in a developing country.
The urgency of the situation means we must immediately reduce emissions in all aspects of our lives. Offsets are not a substitute for this. In March the Senedd set the limit for Wales’s second carbon budget (CB2) at 0%, in line with a recommendation from the Climate Change Committee. This means the Welsh Ministers cannot use offsets for CB2 and Wales must meet CB2 by reducing emissions and removing greenhouse gases within Wales.
If an individual or company outside Wales buys a voluntary carbon offset that results in activity in Wales to reduce or remove greenhouse gas emissions, then that activity will show up in the Welsh greenhouse gas inventory and in the NWEA. As this activity appears in the NWEA, it will contribute towards meeting Wales’s statutory targets. However, because our legislation is based on territorial emissions in Wales and Nationally Determined Contributions are based on territorial emissions in each of the Paris Agreement signatories, this does not lead to double counting between countries. To avoid double counting at an individual or company level, land managers should not both sell offsets and claim them against their own emissions.