Cost and effectiveness of domestic offset schemes

Published: 05/10/2012

The Dutch Ministry of Infrastructure and Environment has appointed Ecofys to carry out a study on the potential effectiveness of a domestic offsetting scheme within the Netherlands to reduce emissions in the sectors of the economy in the Netherlands that are not covered by the EU Emission Trading system (EU ETS).

A domestic offsetting scheme can take several different forms depending on design choices made by policy makers. The design choices influence the overall effectiveness of the scheme, and therefore the potential overall contribution of the mechanism to the national emissions reduction targets. Considering that a domestic offsetting scheme allowing ETS-credits to be assigned to non-ETS sectors is only one of the possible design options, this report examines to what extent different domestic offsetting systems could be an attractive climate instrument in the Dutch context. It tries to answer the central question whether domestic offsetting could contribute in a meaningful way to emission reductions in the non-ETS sectors in the Netherlands, and if so, which design options are most likely to do so.