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MOVING TOWARDS A CLIMATE NEUTRAL UN

4. OFFSETS Offset choice and procedure

The UN system has endeavoured to ensure that its approach to offsetting meets the highest standards of reliability and overall credibility, and contributes as much as possible to environmental protection and sustainable development. By its October 2007 decision, the UN system Chief Executives Board for Coordination chose buying offsets from the Clean Development Mechanism (CDM) to meet its future climate-neutrality goals4

.

This decision was based on, among others, the UN Climate Neutral Strategy5

adopted by the UN system

through the UN Environment Management Group. The Strategy specifies a set of criteria that the institu- tions of the UN system consider to be important for their offset choice, namely, additionality, verification and certification, transparency, conditions related to the time-frame and permanency of emissions re- ductions, sustainable development benefits from the projects, the need to be consistent with inter-govern- mentally accepted standards, and the importance of avoiding conflict of interests through the organiza- tion’s own projects.

From within the set of CDM projects, individual UN organizations have the flexibility to specify additional criteria that they would like projects to meet. The UN Climate Neutral Strategy identifies some such criteria, such as the promoting employment, providing addi- tional social benefits, selecting certain types of projects for their good environmental performance, the mini- mizing negative secondary environmental impacts, and supporting a specific geographical region.

In purchasing offsets, the UN system organizations have followed the relevant administrative rules and regulations that apply to the procurement of goods

4. The World Bank Group has purchased VER+ and pre-CDM emis- sion reductions credits.

5. See http://www.unemg.org/sustainableun.

This process allows for organizations to specify addi- tional criteria that they may wish the Certified Emis- sion Reduction units (CERs) to satisfy, such as those described above. In addition, the practice has been fol- lowed to purchase only CERs that have already been is- sued, to minimize risk to the UN organizations. Further- more, practice has evolved to include the requirement that offset providers carry out the function of retiring CERs so that these do not enter the organization’s ac- counting as assets. The overall process to procure off- sets is managed by the procurement department of the UN system organization in question.

The price paid for offsets varies according to the market and the price offered as a result of the tendering process. The UN rules for procurement require that the solicita- tion document indicate specifications that the offsets must satisfy. During the evaluation phase, criteria are defined in advance to decide whether these specifica- tions are met. Price of offsets could be one of several cri- teria used. These criteria could include a pass/fail item, such as the requirement that offsets be generated by the CDM, or also a weighting system, if there are desirable but not essential attributes. The UN rules aim to ensure that the overall process is fair, objective and balanced.

6. For the UN Secretariat, see http://www.un.org/depts/ptd/pdf/ pm_english_08.pdf.

and services in their respective organizations6 . These

cover issues such as the identification of potential ven- dors, solicitation documents, expression of interest documents, evaluation of bids, etc. In particular, it is essential to follow an open, unbiased and transparent process for identification of potential vendors. Expres- sion of Interest documents have been posted in the usual media used by the UN for advertising upcoming procurement, on the CDM Bazaar, and by posting to relevant major email lists and other vehicles for reach- ing a broad audience.