The concept of Additionality in the Voluntary Carbon Market

The concept of additionality plays a fundamental role in the VCM, since it ensures a tangible impact on the reduction of genuine GHG emissions that would not have occurred without the projects’ intervention. Additionality also helps to distinguish between activities that are already mandated or economically viable and those that require “additional” support to be implemented. There are different types of additionality that are commonly considered in the assessment of projects in voluntary carbon markets:

• Regulatory or legal additionality: It ensures that projects go beyond the requirements imposed by existing regulations or laws. It verifies that the project’s emission reductions are not already mandated and that the project exceeds the minimum legal standards.
• Financial additionality is focused on whether the project requires additional financial support or incentives to be economically viable. It examines whether the project’s revenue from the sale of carbon credits is necessary to cover the incremental costs of the emission reduction activities.
• Technological additionality evaluates whether the project deploys technologies or practices that are not commonly used or would not have been adopted without the incentive of carbon finance. It considers whether the project promotes the adoption of cleaner or more efficient technologies
• Market additionality examines whether the project faces market barriers or failures that prevent the implementation of emission reduction activities without the support of carbon finance. It assesses whether the carbon market provides the necessary incentive to overcome these barriers.