Additionality

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Additionality is the property of an activity being additional. It is a determination of whether an intervention has an effect, when the intervention is compared to a baseline. 'Interventions' can take a variety of forms, but often include economic incentives.[1] For an example of the application of additionality in environmental crediting markets refer to carbon credits.

Additionality may be evaluated ex post, as is often done in the practice of program evaluation. Or it can be done ex ante, as an initial eligibility screen for issuing credits as part of an environmental or other public goods 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. The occurrence of additionality is determined by assessing 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).[2]

Other working definitions of the term is available here.

Economic definition[edit]

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 quicker, 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.[3]

Additionality is calculated by the following formula:[4]

A = IinIrc

where A is the additionality, Iin is the impact of the intervention, and Irc is the impact of a reference case.

Problems[edit]

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 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 with out 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). This without intervention scenario is often referred to as "business as usual").

See also[edit]

References[edit]