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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 abaseline. Interventions can take a variety of forms but often include economic incentives.[1]
Additionality may be evaluated ex post, as is often done in the practice ofprogram evaluation, or ex ante, as an initial eligibility screen for issuing credits as part of an environmental or otherpublic 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, 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).[2]
Other working definitions of the term are availablehere.
For an example of the application of additionality in environmental crediting markets refer tocarbon credits orcarbon offsets.
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.[3]
Additionality is calculated by the following formula:[4]
A =Iin −Irc
whereA is the additionality,Iin is the impact of the intervention, andIrc is the impact of a reference case.
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 earningcarbon 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 without carbon credits). The proposed project is therefore not trulyadditional, since it would have been implemented without the intervention (e.g., in the form of the carbon creditprice signal). This without intervention scenario is often referred to as "business as usual").