Additionality

What does Additionality mean?

Additionality is the difference between what happens with an intervention and what would have happened anyway (the counterfactual). It is central to judging public spending, grants, development finance and carbon credits. The UK Treasury's Green Book, its guidance on appraisal, asks officials to adjust for effects such as deadweight (what would have happened anyway) and displacement (gains that simply move from somewhere else). Example: a subsidy helps 1,000 firms hire, but 600 would have hired anyway (deadweight) and 100 only took workers from other local firms (displacement), so the additional effect is 300 firms, and the true cost per result is more than three times what the headline suggests.