Additionality is the property of an activity being additional by adding something new to the context. It is a determination of whether an intervention has an effect when compared to a
baseline. Interventions can take a variety of forms but often include economic incentives.
Additionality may be evaluated ex post, as is often done in the practice of
program evaluation
Program evaluation is a systematic method for collecting, analyzing, and using information to answer questions about projects, policies and programs, particularly about their effectiveness and efficiency.
In the public, private, and voluntar ...
, or ex ante, as an initial eligibility screen for issuing credits as part of an environmental or other
public goods
In economics, a public good (also referred to as a social good or collective good)Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485–535). Elsevier. is a goods, commodity, product or service that ...
market.
For ex ante applications, additionality is evaluated for proposed activities. A proposed activity is additional if the recognized interventions are deemed to be causing the activity to take place, or whether a proposed activity is distinct from its baseline. A baseline is a prediction of the quantified amount of an input to or output from an activity resulting from the expected future behavior of the actors proposing, and affected by, the proposed activity in the absence of one or more policy interventions, holding all other factors constant (
ceteris paribus
' (also spelled ') (Classical ) is a Latin phrase, meaning "other things equal"; some other English translations of the phrase are "all other things being equal", "other things held constant", "all else unchanged", and "all else being equal". ...
).
Other working definitions of the term are availabl
here
For an example of the application of additionality in environmental crediting markets refer to
carbon credits
Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting p ...
or
carbon offsets.
Economic definition
Net positive difference that results from economic development intervention. The extent to which an activity (and associated outputs, outcomes and impacts) is larger in scale, at a higher quality, takes place more quickly, takes place at a different location, or takes place at all as a result of intervention. Additionality measures the net result, taking account of deadweight, leakage, displacement, substitution and economic multipliers.
Additionality is calculated by the following formula:
where ''A'' is the additionality, ''I''
in is the impact of the intervention, and ''I''
rc is the impact of a reference case.
Problems
Additionality becomes problematic when the parties claim that their behavior is being changed due to recognized intervention (e.g., because of the economic incentive provided by earning
carbon offset
Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting ...
credits), when in fact the intervention is having no effect on their behavior because other factors are dominant (e.g., earning a profit from an activity even without carbon credits). The proposed project is therefore not truly ''additional'', since it would have been implemented without the intervention (e.g., in the form of the carbon credit
price signal
A price signal is information conveyed to consumers and producers, via the prices offered or requested for, and the amount requested or offered of a product or service, which provides a signal to increase or decrease quantity supplied or quantit ...
). This without intervention scenario is often referred to as "
business as usual").
See also
*
Clean Development Mechanism
The Clean Development Mechanism (CDM) is a United Nations-run carbon offset scheme allowing countries to fund greenhouse gas emissions-reducing projects in other countries and claim the saved emissions as part of their own efforts to meet internat ...
– additional climate mitigation measures as defined under the
Kyoto Protocol
The was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is oc ...
*
Carbon credit
Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting p ...
*
Carbon offset
Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting ...
*
Value added
Value added is a term in economics for calculating the difference between market value of a product or service, and the sum value of its constituents. It is relatively expressed by the supply-demand curve for specific units of sale. Value added ...
References
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External links
"What is Additionality? Part 1: A long standing problem," GHG Management Institute, Discussion Paper No. 001, (Jan 2012)."What Is Additionality? Part 2: A framework for a more precise definitions and standardized approaches," GHG Management Institute, Discussion Paper No. 002, (Jan 2012)."What Is Additionality? Part 3: Implications for stacking and unbundling," GHG Management Institute, Discussion Paper No. 003, (Jan 2012)."Understanding Carbon Offsets, REC's, and Additionality," White Paper, June 29, 2022
Public economics
Development economics