WEBVTT Kind: captions; Language: fi 1 00:00:00.000 --> 00:00:06.160 thank you very much for inviting me to 2 00:00:06.160 --> 00:00:09.890 give this speech about carbon offsets, whether they 3 00:00:09.890 --> 00:00:14.880 are greenwashing or real climate action. So I have my background 4 00:00:14.880 --> 00:00:19.780 in energy sciences and system analyses related to energy systems and 5 00:00:19.780 --> 00:00:24.450 and biomass use and climate change mitigation basically 6 00:00:24.450 --> 00:00:31.020 but today I'm talking about these offsets and in order to ah 7 00:00:31.020 --> 00:00:36.530 discuss or or analyze that whether any kind of action 8 00:00:36.530 --> 00:00:42.360 is it good or bad for climate, I think it needs to be put in the context 9 00:00:42.360 --> 00:00:47.270 so that's why I use some time first for some um 10 00:00:47.270 --> 00:00:52.270 (problem with slides) 11 00:00:52.270 --> 00:00:56.290 some general background about global greenhouse gas emissions and 12 00:00:56.290 --> 00:01:00.130 climate change mitigation targets 13 00:01:00.130 --> 00:01:05.160 yes so here you can see 14 00:01:05.160 --> 00:01:10.280 the historic development of global CO2 emissions, so we know that they have been 15 00:01:10.280 --> 00:01:15.380 rising all the time and the only exceptions are actually those years or 16 00:01:15.380 --> 00:01:20.460 periods when there has been some kind of ah economic downturn 17 00:01:20.460 --> 00:01:25.480 and naturally this covid pandemic is also an exception, or 18 00:01:25.480 --> 00:01:30.400 well we don't know how exception it will be and what kind of future we will have 19 00:01:30.400 --> 00:01:35.760 but but we we can see that the missions globally have declined quite 20 00:01:35.760 --> 00:01:40.290 much actually ah within the last year 21 00:01:40.290 --> 00:01:45.590 but still the forecasts and projections 22 00:01:45.590 --> 00:01:50.150 for the future says that 23 00:01:50.150 --> 00:01:56.040 yes thank you 24 00:01:56.040 --> 00:02:01.520 so the projections show that if we don't do anything 25 00:02:01.520 --> 00:02:06.060 more than we are currently doing 26 00:02:06.060 --> 00:02:11.160 the temperature increase will exceed quite dramatically 27 00:02:11.160 --> 00:02:15.700 the Paris agreement target, so if we follow the current policies 28 00:02:15.700 --> 00:02:20.550 the greenhouse gas emissions still continue growing or perhaps 29 00:02:20.550 --> 00:02:25.300 will stable at some point but not reduce as much as they 30 00:02:25.300 --> 00:02:29.950 they should in order to get to the Paris agreement target 31 00:02:29.950 --> 00:02:35.050 we can also see here what kind of pledges and targets different nations have 32 00:02:35.050 --> 00:02:40.200 provided and that we can we can get in a little bit 33 00:02:40.200 --> 00:02:45.460 lower level in the temperature increase but we are still far from what 34 00:02:45.460 --> 00:02:50.340 we have agreed in the Paris agreement, so 35 00:02:50.340 --> 00:02:55.130 the next slide 36 00:02:55.130 --> 00:03:00.280 okay 37 00:03:00.280 --> 00:03:05.430 so here we can see basically what is the gap between 38 00:03:05.430 --> 00:03:10.410 the pledges and targets different nations have 39 00:03:10.410 --> 00:03:15.430 provided and between the Paris agreement target 40 00:03:15.430 --> 00:03:20.580 roughly we can say that the gap is approximately 41 00:03:20.580 --> 00:03:26.260 half of the global greenhouse gas emissions which is really much 42 00:03:26.260 --> 00:03:30.490 by twenty thirty so we have less than ten years time and and 43 00:03:30.490 --> 00:03:35.400 we need to halve the global emissions so that's much 44 00:03:35.400 --> 00:03:37.150 and here 45 00:03:37.150 --> 00:03:42.620 and here is the figure from the IPCC special report 46 00:03:42.620 --> 00:03:47.160 and I think this is also of very important, these 47 00:03:47.160 --> 00:03:52.240 are very important figures showing that what should actually happen in order to get to those 48 00:03:52.240 --> 00:03:57.420 Paris agreements targets. In the gray area we can see um 49 00:03:57.420 --> 00:04:02.170 how the fossil CO2 emissions should develop 50 00:04:02.170 --> 00:04:07.180 so basically we should aim to decline the fossil greenhouse gas 51 00:04:07.180 --> 00:04:12.160 emissions as low as possible as quickly as possible 52 00:04:12.160 --> 00:04:18.000 in the brown area you can see the land use sector and the land use 53 00:04:18.000 --> 00:04:23.230 there are emissions and there are carbon sequestration and together they are currently 54 00:04:23.230 --> 00:04:28.830 net emissions. So these net emissions should turn to net 55 00:04:28.830 --> 00:04:34.730 sink by the middle of this century 56 00:04:34.730 --> 00:04:39.590 and what we can also see from here is that 57 00:04:39.590 --> 00:04:45.180 the faster we can decline the fossil based emissions 58 00:04:45.180 --> 00:04:50.090 the less we need carbon sequestration from the atmosphere and vice 59 00:04:50.090 --> 00:04:55.110 versa and also it's possible that we will need some kind of technical 60 00:04:55.110 --> 00:05:00.230 removing of carbon dioxide from the atmosphere if it's not enough 61 00:05:00.230 --> 00:05:05.200 what land use sector can do. (next one please) 62 00:05:05.200 --> 00:05:10.680 so well it's not a new thing that the fossil 63 00:05:10.680 --> 00:05:16.040 emissions are quite differently separated between 64 00:05:16.040 --> 00:05:21.520 world so there are large countries which are emitting together 65 00:05:21.520 --> 00:05:26.600 approximately twice that of the rest of the world, so China and USA 66 00:05:26.600 --> 00:05:31.910 EU and India and there is also different kind of development in these emissions so in the USA 67 00:05:31.910 --> 00:05:37.250 emissions have gone down and in the EU they're also slightly going down while in the 68 00:05:37.250 --> 00:05:42.520 rest of the world they actually have been growing. (next slide) 69 00:05:42.520 --> 00:05:45.790 here we can see the per capita CO2 emissions 70 00:05:45.790 --> 00:05:51.880 where also world is quite much separated in that, so 71 00:05:51.880 --> 00:05:57.630 in the USA it's very striking that the per capita CO2 72 00:05:57.630 --> 00:06:02.950 emissions are significantly higher compared to the world average. It's also true that 73 00:06:02.950 --> 00:06:07.980 in China and in the EU the CO2 emissions per capita is significantly higher 74 00:06:07.980 --> 00:06:13.060 compared to world average 75 00:06:13.060 --> 00:06:18.170 and there is also this kind of different development in 76 00:06:18.170 --> 00:06:23.040 these per capita emissions. (next one) 77 00:06:23.040 --> 00:06:28.460 so those were the so-called territorial based emissions, or production 78 00:06:28.460 --> 00:06:33.410 based emissions so what are the emissions for example within a country if we measure only 79 00:06:33.410 --> 00:06:38.220 only those emissions which take place in that territory, let's say 80 00:06:38.220 --> 00:06:43.370 for example in Finland, we can also take a different angle on this 81 00:06:43.370 --> 00:06:48.410 assess that what are the consumption-based emissions, which mean that 82 00:06:48.410 --> 00:06:53.230 we account emissions based on consumption 83 00:06:53.230 --> 00:06:58.500 so emissions embodied in imports are accounted for 84 00:06:58.500 --> 00:07:03.740 and then emissions embodied in exports from the particular country 85 00:07:03.740 --> 00:07:08.420 are then deducted from the balance. What we can see here 86 00:07:08.420 --> 00:07:13.290 is basically the same story but typically consumption-based emissions in rich countries 87 00:07:13.290 --> 00:07:20.110 are even higher than the production-based emissions. For example this is true for Finland, in which consumption- 88 00:07:20.110 --> 00:07:25.630 based CO2 emissions are one of the highest in the world. 89 00:07:25.630 --> 00:07:30.610 what is also important to know is that it's not only difference between countries 90 00:07:30.610 --> 00:07:35.460 in greenhouse gas emissions, there's also significant difference between 91 00:07:35.460 --> 00:07:40.930 individuals, so we can say that the richest 92 00:07:40.930 --> 00:07:45.240 persons of the world population cause more emissions 93 00:07:45.240 --> 00:07:49.600 than the poorest 50 percent 94 00:07:49.600 --> 00:07:54.840 of the population and this is something which is very important 95 00:07:54.840 --> 00:07:59.170 to understand and I would say that this is actually quite much also related to the topic 96 00:07:59.170 --> 00:08:03.880 which I'm talking today, which is about these offsets 97 00:08:03.880 --> 00:08:06.200 next one, please. 98 00:08:06.200 --> 00:08:11.120 so and this is also much related to the carbon offsets 99 00:08:11.120 --> 00:08:15.690 so this is a principal figure on marginal emission 100 00:08:15.690 --> 00:08:20.710 reduction costs of different kind of actions 101 00:08:20.710 --> 00:08:24.780 so there are a number of different kind of measures, different technologies, 102 00:08:24.780 --> 00:08:29.130 different kind of policies 103 00:08:29.130 --> 00:08:34.450 measures influencing the consumption et cetera, et cetera and they all have 104 00:08:34.450 --> 00:08:39.190 different kind of cost efficiency 105 00:08:39.190 --> 00:08:44.180 I wouldn't like to put any 106 00:08:44.180 --> 00:08:49.950 concrete measures here because this is naturally 107 00:08:49.950 --> 00:08:54.420 heavily, they are heavily subjective to the assumptions 108 00:08:54.420 --> 00:08:59.520 made behind so there are a lot of uncertainties, and it's hard actually to 109 00:08:59.520 --> 00:09:04.440 show a figure that this technology costs this much and some other technology 110 00:09:04.440 --> 00:09:10.040 costs this much. Perhaps some ranges could be shown but still there are a number of uncertainties 111 00:09:10.040 --> 00:09:14.580 But the principle is important, that there are negative emissions 112 00:09:14.580 --> 00:09:19.690 basically, due to certain reasons, there 113 00:09:19.690 --> 00:09:24.830 are certainly measures which we can take, they are economically viable already 114 00:09:24.830 --> 00:09:30.120 but due to some reasons they are not necessarily implemented 115 00:09:30.120 --> 00:09:34.610 for example there's lack of knowledge of common practices, whatever 116 00:09:34.610 --> 00:09:39.800 which prevent them to be implemented and then there is a range 117 00:09:39.800 --> 00:09:44.540 of technologies or solutions which can be implemented with relatively 118 00:09:44.540 --> 00:09:49.390 low costs and then there are technologies which are 119 00:09:49.390 --> 00:09:54.290 very high cost, and anything in between. 120 00:09:54.290 --> 00:09:59.680 (next one) Okay, then if we start thinking 121 00:09:59.680 --> 00:10:04.700 that how these carbon offsets fit to all this background 122 00:10:04.700 --> 00:10:10.100 information, if we start that what do we mean with the carbon offsets, so basically 123 00:10:10.100 --> 00:10:15.260 it is a unit of carbon dioxide or carbon dioxide nay equivalent that 124 00:10:15.260 --> 00:10:20.250 is reduced, avoided, or sequestered 125 00:10:20.250 --> 00:10:25.490 to compensate for any emissions which takes place somewhere else 126 00:10:25.490 --> 00:10:30.610 so that is the basic definition for carbon offsets. 127 00:10:30.610 --> 00:10:35.720 and there is a nice concept of hierarchy 128 00:10:35.720 --> 00:10:40.780 in climate change mitigation and I think this is actually really really important, so basically we 129 00:10:40.780 --> 00:10:45.820 can divide all the global emissions to single-unit processes 130 00:10:45.820 --> 00:10:51.350 let's say that for single site, single processes, single actions 131 00:10:51.350 --> 00:10:55.740 which cause the emissions. And if we then consider certain actions 132 00:10:55.740 --> 00:11:01.900 which is causing greenhouse gas emissions there's a current situation and the emissions are caused 133 00:11:01.900 --> 00:11:06.080 and then we would like to cut down those emissions, so we aim to be 134 00:11:06.080 --> 00:11:10.760 carbon neutral for example, which is a target that 135 00:11:10.760 --> 00:11:15.740 is the aim in many many contexts. Now what else 136 00:11:15.740 --> 00:11:20.630 what should we do? So first of all, according to this hierarchy 137 00:11:20.630 --> 00:11:25.170 we need to, we try to avoid 138 00:11:25.170 --> 00:11:29.680 emissions by trying to reduce the activity so that 139 00:11:29.680 --> 00:11:34.100 if we can reduce the activity naturally we don't cause those 140 00:11:34.100 --> 00:11:38.520 emissions related to that activity at all 141 00:11:38.520 --> 00:11:43.850 The second phase is that we can try to reduce the emissions, so we are still 142 00:11:43.850 --> 00:11:48.850 doing certain amount of the activity but we would like to do it better with less 143 00:11:48.850 --> 00:11:54.070 greenhouse gas emissions. So we can improve the efficiency, let's say energy efficiency 144 00:11:54.070 --> 00:11:59.290 or we can make some kind of fuel 145 00:11:59.290 --> 00:12:04.660 switch for example switch from fossil fuels to renewables 146 00:12:04.660 --> 00:12:09.320 and still use and produce the energy required and that way 147 00:12:09.320 --> 00:12:14.660 reduce the greenhouse gas intensity and then after these 148 00:12:14.660 --> 00:12:19.630 there is still some emissions left what we cannot 149 00:12:19.630 --> 00:12:24.700 reduce and this is where the offsets actually step in 150 00:12:24.700 --> 00:12:30.880 and so it's the final phase, so we should first avoid then reduce and 151 00:12:30.880 --> 00:12:37.000 at the end only use these offsets according to this hierarchy 152 00:12:37.000 --> 00:12:39.380 Okay, next one 153 00:12:39.380 --> 00:12:44.990 Here are some basic figures from the current global voluntary 154 00:12:44.990 --> 00:12:50.020 carbon offset markets, so currently the typically 155 00:12:50.020 --> 00:12:54.760 typically units sold globally are something like approximately 156 00:12:54.760 --> 00:13:01.170 one hundred million tonnes of carbon dioxide annually during the last decade 157 00:13:01.170 --> 00:13:04.820 it can be compared for example to Finnish national emissions 158 00:13:04.820 --> 00:13:09.970 it's twice the amount of Finnish national emissions approximately, but only 159 00:13:09.970 --> 00:13:14.940 like 0.2 percent of the global annual greenhouse gas emissions 160 00:13:14.940 --> 00:13:20.360 and the price of, the average price of these units sold is pretty low it's only 161 00:13:20.360 --> 00:13:24.800 something like less than five euros per CO2 tonne 162 00:13:24.800 --> 00:13:29.950 but there is a large interest and demand perhaps for 163 00:13:29.950 --> 00:13:34.940 for these kind of voluntary carbon offsets so it's 164 00:13:34.940 --> 00:13:40.200 possible that the market may expand very significantly 165 00:13:40.200 --> 00:13:45.390 within the upcoming years. And if we consider this 166 00:13:45.390 --> 00:13:50.070 average price, it's really low compared to what we are actually now seeing 167 00:13:50.070 --> 00:13:54.890 for example in the EU emission trading scheme which is something like 168 00:13:54.890 --> 00:14:00.140 I don't know the current price level but let's say thirty or fifty euros per 169 00:14:00.140 --> 00:14:05.210 tonne of CO2 and according to many climate change mitigation scenarios 170 00:14:05.210 --> 00:14:09.930 we will need a carbon price between, let's say fifty to one hundred, even more 171 00:14:09.930 --> 00:14:14.880 than one hundred euros per tonne of CO2 in order 172 00:14:14.880 --> 00:14:20.050 to reach those targets. So just the magnitude difference between these voluntary 173 00:14:20.050 --> 00:14:24.720 carbon offsets and what is required. (next one) 174 00:14:24.720 --> 00:14:29.430 Okay, then there are certain key challenges related 175 00:14:29.430 --> 00:14:34.150 to these carbon offsets and first 176 00:14:34.150 --> 00:14:39.170 of all, when considering that, okay, we do something 177 00:14:39.170 --> 00:14:44.110 we purchase some carbon offset. The question is that is it additional 178 00:14:44.110 --> 00:14:48.080 which means that for example if we invest in wind 179 00:14:48.080 --> 00:14:53.210 power somewhere is it additional compared to what would have happened without 180 00:14:53.210 --> 00:14:57.340 that particular project or offset purchasing 181 00:14:57.340 --> 00:15:02.500 the second important question is that is it permanent. So if we 182 00:15:02.500 --> 00:15:07.450 do the carbon offset, are we sure that the carbon is not 183 00:15:07.450 --> 00:15:12.360 released later to the atmosphere. This is particularly important when considering all 184 00:15:12.360 --> 00:15:17.630 the land-based measures, for example afforestation projects, there is a forest sequestering 185 00:15:17.630 --> 00:15:22.310 carbon but we don't know whether the forest remains there and how 186 00:15:22.310 --> 00:15:27.090 long and if the carbon will be released to the atmosphere later. 187 00:15:27.090 --> 00:15:32.490 then there is the question about carbon leakage, so even if the project 188 00:15:32.490 --> 00:15:37.740 is additional in the particular site or system boundary, the process is 189 00:15:37.740 --> 00:15:42.830 additional, but then how can we be sure that there would not 190 00:15:42.830 --> 00:15:49.000 be any kind of carbon leakage outside that system boundary 191 00:15:49.000 --> 00:15:53.410 so for example if we conserve forests at some 192 00:15:53.410 --> 00:15:58.490 sites, then how can we be sure that the loggings do not 193 00:15:58.490 --> 00:16:03.700 take place outside that forest which was conserved 194 00:16:03.700 --> 00:16:09.290 and then there is the question of double counting, which is also really really important 195 00:16:09.290 --> 00:16:13.870 how can we be sure that emission reduction unit which is attributed 196 00:16:13.870 --> 00:16:18.850 to carbon offset activity and purchased by someone 197 00:16:18.850 --> 00:16:24.750 is not accounted as an emission reduction by some other activity 198 00:16:24.750 --> 00:16:29.100 and there is this kind of problem that these voluntary carbon markets, which typically 199 00:16:29.100 --> 00:16:34.090 companies, organisations, individuals do, they are not 200 00:16:34.090 --> 00:16:39.390 in the book keeping of what countries report to the convention 201 00:16:39.390 --> 00:16:44.510 to the climate convention, so there is a possibility that 202 00:16:44.510 --> 00:16:49.190 that these kind of offsets belong also to the targets 203 00:16:49.190 --> 00:16:53.900 in which the countries have committed and they are accounted there 204 00:16:53.900 --> 00:16:56.380 there once again. 205 00:16:56.380 --> 00:17:01.637 and so these four challenges are very typically shown and 206 00:17:01.637 --> 00:17:06.490 connected to the carbon offsets. But I would say 207 00:17:06.490 --> 00:17:11.747 that there also other challenges and that's why I would like to 208 00:17:11.747 --> 00:17:16.600 raise this fifth challenge which is fairness. So how can we be sure 209 00:17:16.600 --> 00:17:21.857 that emission reduction caused by carbon offsets do not cause problems to 210 00:17:21.857 --> 00:17:26.710 some other actors to reduce their emissions? if we consider for 211 00:17:26.710 --> 00:17:31.967 example that rich countries would like to purchase cheap emission 212 00:17:31.967 --> 00:17:36.820 reductions from developing countries and then there are the emissions left in 213 00:17:36.820 --> 00:17:42.077 the developing countries but not technologies or solutions to cut down those emissions 214 00:17:42.077 --> 00:17:46.930 with a cheap price, they have 215 00:17:46.930 --> 00:17:54.340 to pay a higher price for those emissions. And then we can ask that is it fair or not. 216 00:17:54.340 --> 00:17:59.980 Criticism has been raised against carbon offset projects 217 00:17:59.980 --> 00:18:05.250 this is an example of a very recent working paper in which they analyzed that 218 00:18:05.250 --> 00:18:10.760 the carbon offsets, the world's largest carbon offset 219 00:18:10.760 --> 00:18:16.580 program, Clean Development, Clean Development Mechanism and 220 00:18:16.580 --> 00:18:21.270 and some wind farms 221 00:18:21.270 --> 00:18:26.080 generated in India, actually 222 00:18:26.080 --> 00:18:30.390 failed to generate the greenhouse gas 223 00:18:30.390 --> 00:18:35.040 emission reductions globally because they recognized that there was 224 00:18:35.040 --> 00:18:39.440 a problem in additionality in more than half of, at 225 00:18:39.440 --> 00:18:43.950 least in more than half of the 226 00:18:43.950 --> 00:18:49.510 projects generated and because of that those 227 00:18:49.510 --> 00:18:54.750 countries which then purchased those offsets, they continued 228 00:18:54.750 --> 00:19:00.340 their emissions and the overall conclusion was that the global greenhouse 229 00:19:00.340 --> 00:19:04.880 gas emissions actually increased not decreased 230 00:19:04.880 --> 00:19:11.210 then there are possibilities to overcome 231 00:19:11.210 --> 00:19:16.540 these challenges related to carbon offsets 232 00:19:16.540 --> 00:19:18.400 so, 233 00:19:18.400 --> 00:19:25.140 and there are and these are not new things and the companies who are selling these kind of offsets they continuously 234 00:19:25.140 --> 00:19:30.270 think about these and what they can do for these 235 00:19:30.270 --> 00:19:35.310 but it is a difficult task because these are so fundamental 236 00:19:35.310 --> 00:19:40.360 and they are not something which the company who is 237 00:19:40.360 --> 00:19:45.180 selling those offset credits can make sure that 238 00:19:45.180 --> 00:19:49.840 or can solve by themself 239 00:19:49.840 --> 00:19:53.780 but there are possibilities so choosing different 240 00:19:53.780 --> 00:19:57.450 kind of 241 00:19:57.450 --> 00:20:03.110 offset projects, using certain standards, criteria, things like that 242 00:20:03.110 --> 00:20:08.790 it is possible to avoid those risks, reduce those risks but not 243 00:20:08.790 --> 00:20:13.870 to avoid totally those risks related to these challenges 244 00:20:13.870 --> 00:20:18.960 and I would say that the only option actually to 245 00:20:18.960 --> 00:20:24.410 avoid totally, to solve these challenges, so that we can then say that these offset projects 246 00:20:24.410 --> 00:20:29.410 really work, would be a kind of, I would say that it would be a kind of 247 00:20:29.410 --> 00:20:34.250 global level, all emission sector covering 248 00:20:34.250 --> 00:20:38.880 emission trading system in which we actually verify 249 00:20:38.880 --> 00:20:43.880 and monitor all the emissions and emission allowances sold 250 00:20:43.880 --> 00:20:49.230 but solving 251 00:20:49.230 --> 00:20:53.990 the fairness problem would mean then that all those emission caps, so first 252 00:20:53.990 --> 00:20:59.140 of all we would need global emission caps and that should be 253 00:20:59.140 --> 00:21:04.290 shared among the countries in the first place but then it should be shared 254 00:21:04.290 --> 00:21:09.150 among the individuals so that its fair for everyone 255 00:21:09.150 --> 00:21:14.080 so we are still quite far from this kind of a situation 256 00:21:14.080 --> 00:21:19.950 but at least in fairly I would say that that is kind of a system could solve 257 00:21:19.950 --> 00:21:24.330 those key challenges at the same time. 258 00:21:24.330 --> 00:21:29.670 but this is not something what offset sellers or offset 259 00:21:29.670 --> 00:21:34.110 purchasers could solve by themselves 260 00:21:34.110 --> 00:21:37.160 so next one please 261 00:21:37.160 --> 00:21:42.290 then the question is that what actually, if people or organisations would like to 262 00:21:42.290 --> 00:21:47.730 purchase carbon offsets how can they minimise risk of 263 00:21:47.730 --> 00:21:52.410 being just greenwashing? And I would like to raise 264 00:21:52.410 --> 00:21:57.250 two important points here. First of all, I think it's 265 00:21:57.250 --> 00:22:02.590 really really important that this hierarchy must work so 266 00:22:02.590 --> 00:22:07.390 I would like to show again this figure now, this 267 00:22:07.390 --> 00:22:12.350 is not the hierarchy figure I showed 268 00:22:12.350 --> 00:22:17.490 in a previous slide but now the abatement cost curve, because in order to make 269 00:22:17.490 --> 00:22:22.790 the hierarchy work we have to 270 00:22:22.790 --> 00:22:27.380 make sure that we actually avoid our own emissions 271 00:22:27.380 --> 00:22:31.910 at the first place and then second reduce our emissions 272 00:22:31.910 --> 00:22:35.880 and at the last phase we make the compensations 273 00:22:35.880 --> 00:22:40.940 So first of all, we need to find out where there are 274 00:22:40.940 --> 00:22:45.490 actions what can be reduced in order to avoid emissions, perhaps 275 00:22:45.490 --> 00:22:50.540 they are something which take place with negative costs or 276 00:22:50.540 --> 00:22:55.530 with very low costs. Then there are certainly possibilities 277 00:22:55.530 --> 00:23:00.050 to reduce our own emissions likely with 278 00:23:00.050 --> 00:23:04.920 reasonable costs and at some point there are certainly situations 279 00:23:04.920 --> 00:23:09.360 there are emissions left but the marginal emission 280 00:23:09.360 --> 00:23:14.090 reduction costs go very high 281 00:23:14.090 --> 00:23:19.200 so that's where actually the offset 282 00:23:19.200 --> 00:23:23.130 -- 283 00:23:23.130 --> 00:23:28.810 where the offsets actually should step in again and 284 00:23:28.810 --> 00:23:33.460 this is a little bit difficult thing but basically 285 00:23:33.460 --> 00:23:38.200 because typically this is a totally different thing compared to the situation 286 00:23:38.200 --> 00:23:43.280 and the idea in emission trading system, in which we aim for cost 287 00:23:43.280 --> 00:23:48.200 efficiency so we don't reduce our own emissions under the emission 288 00:23:48.200 --> 00:23:53.310 trading system if it's more cost efficient to buy emission allowances 289 00:23:53.310 --> 00:23:58.310 from the market. But this should not be the case regarding offsets in order to 290 00:23:58.310 --> 00:24:03.720 make this hierarchy work. So what I'm saying is that actually 291 00:24:03.720 --> 00:24:08.830 in order that the carbon offsets would step in 292 00:24:08.830 --> 00:24:13.130 to this picture as a last option 293 00:24:13.130 --> 00:24:18.210 the offset projects should actually be quite expensive. How expensive, 294 00:24:18.210 --> 00:24:23.200 that's a difficult question but if we consider that we improve 295 00:24:23.200 --> 00:24:28.260 our cost efficiency by purchasing very cheap offset 296 00:24:28.260 --> 00:24:33.290 offset credits, then we likely fail to make 297 00:24:33.290 --> 00:24:38.170 this hierarchy work and also it's true that if we 298 00:24:38.170 --> 00:24:43.150 purchase expensive offset credits then it's more 299 00:24:43.150 --> 00:24:48.200 likely that the additionality criteria is fulfilled, because if it's 300 00:24:48.200 --> 00:24:53.250 above the typical market price it's likely much 301 00:24:53.250 --> 00:24:58.230 more easy to claim that these would not take place without 302 00:24:58.230 --> 00:25:03.150 this offset project. And my second point then is that 303 00:25:03.150 --> 00:25:08.560 of course after careful consideration of all this, there are certain emissions 304 00:25:08.560 --> 00:25:13.300 left and then if carbon offers up would 305 00:25:13.300 --> 00:25:18.410 like to be purchased then there are options what 306 00:25:18.410 --> 00:25:23.590 to do, there are pros and cons of different services supplied so there are a number 307 00:25:23.590 --> 00:25:28.530 of companies providing these services 308 00:25:28.530 --> 00:25:33.320 with different pros and cons, I'm not going to say anything about those 309 00:25:33.320 --> 00:25:38.610 but just in principle that there are possibilities, 310 00:25:38.610 --> 00:25:43.430 options to choose, for example in 311 00:25:43.430 --> 00:25:48.640 which country this offset project takes place, is it a domestic one, 312 00:25:48.640 --> 00:25:53.410 is it in some let's say for example in some developing country, what 313 00:25:53.410 --> 00:25:58.560 type of project, wind power, energy efficiency, afforestation 314 00:25:58.560 --> 00:26:03.680 or is it just purely purchasing emission allowances from 315 00:26:03.680 --> 00:26:08.850 the EU emission trading scheme and then just eliminate those allowances. There are different 316 00:26:08.850 --> 00:26:13.810 possibilities and there are different pros and cons included in all these 317 00:26:13.810 --> 00:26:18.960 different transparency, different criteria applied by different suppliers 318 00:26:18.960 --> 00:26:23.840 very difficult to conclude that what should be promoted 319 00:26:23.840 --> 00:26:29.650 and what should be chosen, what should not be chosen because all 320 00:26:29.650 --> 00:26:34.500 off these face some kind of, and different challenges 321 00:26:34.500 --> 00:26:38.880 regarding those key criteria which I presented 322 00:26:38.880 --> 00:26:44.160 finally there is also the question left that how much to offset and I'm not meaning now that 323 00:26:44.160 --> 00:26:49.020 we should offset more, that we should 324 00:26:49.020 --> 00:26:54.360 avoid and reduce our own emissions less and offset more, but what I'm saying is that 325 00:26:54.360 --> 00:26:59.260 if we have carefully followed the hierarchy and declined 326 00:26:59.260 --> 00:27:04.640 our own emissions as much as possible and the emissions left then the question is that 327 00:27:04.640 --> 00:27:09.510 if you remember the Paris agreement target figure 328 00:27:09.510 --> 00:27:14.730 how much we should decline our emissions so we should reduce as much as possible 329 00:27:14.730 --> 00:27:19.600 and there are still the emissions left so it's still the question 330 00:27:19.600 --> 00:27:24.710 that are we happy to keep the emissions at that level 331 00:27:24.710 --> 00:27:29.540 or do we consider that we still need to decline those emissions 332 00:27:29.540 --> 00:27:34.300 so also that's why there is an idea that perhaps we should 333 00:27:34.300 --> 00:27:38.530 over-offset so if there is one unit of emissions caused 334 00:27:38.530 --> 00:27:42.910 should we actually purchase offsets for two units 335 00:27:42.910 --> 00:27:47.240 in order to get that kind of declining trend 336 00:27:47.240 --> 00:27:50.270 something to think about perhaps. 337 00:27:50.270 --> 00:27:55.490 and this is my last slide and there is now the question on which was 338 00:27:55.490 --> 00:28:00.460 in my title that are these carbon offsets greenwashing 339 00:28:00.460 --> 00:28:05.040 or real climate action, and I would conclude that both can 340 00:28:05.040 --> 00:28:10.710 be true but if we consider that, I think 341 00:28:10.710 --> 00:28:15.320 it can be expected that in many cases we really see 342 00:28:15.320 --> 00:28:19.880 challenges and risks that these key criteria are not 343 00:28:19.880 --> 00:28:24.660 fulfilled at the current situation at least 344 00:28:24.660 --> 00:28:29.750 so that tends to turn my conclusion from the first 345 00:28:29.750 --> 00:28:35.200 option that they are more like greenwash than than real climate 346 00:28:35.200 --> 00:28:40.080 action but I won't like to say that. What I would like to say 347 00:28:40.080 --> 00:28:44.840 is that if the hierarchy and if the 348 00:28:44.840 --> 00:28:51.050 offset projects are carefully considered and implemented 349 00:28:51.050 --> 00:28:55.140 there is a good possibility that they are actually real 350 00:28:55.140 --> 00:28:59.960 climate action that can support the own emission reductions. But 351 00:28:59.960 --> 00:29:05.300 last I would like to say that because it's a typically presented question 352 00:29:05.300 --> 00:29:10.090 that if, because there are these problems with the offsets, should I 353 00:29:10.090 --> 00:29:15.040 then not do anything and that's not perhaps a good conclusion, I would 354 00:29:15.040 --> 00:29:19.830 say that it's better to do these offset projects than do nothing 355 00:29:19.830 --> 00:29:24.260 but it's certainly much better to try to cut down the own emissions 356 00:29:24.260 --> 00:29:28.450 as much as possible than try to offset them 357 00:29:28.450 --> 00:29:32.450 thank you very much. 358 00:29:32.450 --> 00:29:33.790 Thank you, Sampo. 359 00:29:33.790 --> 00:29:39.410 We can have a quick 360 00:29:39.410 --> 00:29:44.140 question if someone has, yes Mikael. - Thanks a lot, 361 00:29:44.140 --> 00:29:49.240 I think the key question here in my mind is that how do you 362 00:29:49.240 --> 00:29:53.990 think these compensations, they affect 363 00:29:53.990 --> 00:29:58.890 the hierarchy of the business organisations because often the idea is to have more 364 00:29:58.890 --> 00:30:03.450 activity 365 00:30:03.450 --> 00:30:08.450 by using these emissions, so you are saying that sticking to the hierarchy is very 366 00:30:08.450 --> 00:30:14.440 important but does compensation actually work against the hierarchy? 367 00:30:14.440 --> 00:30:18.590 - So do you mean that if we do these kind of 368 00:30:18.590 --> 00:30:23.430 offset projects, we create economic activity which generates emissions? 369 00:30:23.430 --> 00:30:28.470 - Not directly but is it used as a way to keep economic 370 00:30:28.470 --> 00:30:33.000 activity at the level or increasing? - Yes, well 371 00:30:33.000 --> 00:30:38.310 I think, that's a really important question, I don't know if have any 372 00:30:38.310 --> 00:30:42.880 answer to that but I think it's related to all those 373 00:30:42.880 --> 00:30:47.610 challenges we are facing basically 374 00:30:47.610 --> 00:30:52.290 so, yes, so 375 00:30:52.290 --> 00:30:56.700 so that's what happens 376 00:30:56.700 --> 00:31:02.360 yeah, but I don't know what to answer because 377 00:31:02.360 --> 00:31:07.470 in a way of course we must keep economy running, we 378 00:31:07.470 --> 00:31:13.090 can't stop our economy, there are emissions which are certainly left and 379 00:31:13.090 --> 00:31:18.040 then something has to be done for them 380 00:31:18.040 --> 00:31:23.350 the problem is that if we, I think the major problem is that we use 381 00:31:23.350 --> 00:31:27.690 offsets instead of reducing our own emissions so 382 00:31:27.690 --> 00:31:32.970 if the hierarchy is not working then I would say that we are certainly facing problems 383 00:31:32.970 --> 00:31:38.300 but we might face the problems even if we do it according to it 384 00:31:38.300 --> 00:31:41.950 I don't have any clear answer to that, good question 385 00:31:41.950 --> 00:31:47.520 thank you. Any other questions 386 00:31:47.520 --> 00:31:52.170 or comments? If not, then thank you very much Sampo!