December 3, 2008

That's the term coined by Joe Romm for the practice of buying credits from companies that claim to use your money to fund projects that cut carbon emissions. He helpfully reminds us of what happens when carbon offsets become an integral part of a cap-and-trade system: things get ugly. According to Reuters:
The U.N. climate change body has suspended one of the largest auditors of clean energy projects under Kyoto Protocol, a move highlighting problems long aired by critics of the climate pact's greenhouse gas trading scheme.

Norway's DNV had their accreditation as project auditors suspended late last week for five "non-conformities" relating to its practices, the U.N. said after performing a spot check of the company's operations in early November.

This company handles most of the $13 billion trade in carbon off-sets enabled by the Kyoto Treaty and it turns out that DNV wasn't doing its job of making sure that offset related projects wouldn't have happened anyway (i.e. without someone paying for it via the carbon market).

This isn't exaclty the first time problems have arisen. Romm also refers to the now-closed "loophole" in the Kyoto accords that allowed Chinese companies to receive $6 billion to collect and destroy greenhouse gas refrigerants. It was a task that 1) cost a tiny fraction of the "fee" to perform and 2) they were planning on doing anyway. I could use a loophole like that. The examples of malfeasance are too numerous to mention here, but Romm takes a shot at it.

That's not to say you shouldn't use offset providers like Terrapass or NativeEnergy (both of which swear up and down they are rigorous about the "additionality" of their offsets, i.e. that purchasing their offsets pays for emissions cuts that wouldn't have otherwise happened). Though it's true that Joe Romm would rather you forgo offsets and instead participate in a service called Carbon Retirement, whereby you can purchase emissions permits on the European carbon market and simply never use them.

The fact is that, like the Kyoto countries themselves, you'd be better off reducing your carbon footprint by, you know, emitting less carbon. Here's a suggestion, if your power company offers the ability to purchase renewable power for an extra fee (like we can in Philly with PECOWind) then do it. That said, as individuals our options at the moment are limited and sometimes offsets can be useful. Yet neither should they be relied on as were the sale of papal indulgences of old when the rich got to sin because they could afford to buy absolution.

We do therefore have to ensure that offsets play a minor to non-existent role in any US cap-and-trade system. We'll never become a low-carbon economy if you can simply, Pilate-like, wash your hands of your emissions and let someone else deal with the cuts. And it's clear that the GOP will try to make offsets a central part of climate change legislation - John McCain's plan did. This is a major worry for two reasons: 1) it pushes the day of emissions cutting reckoning far off into the future and possibly past the climatic point of no return and 2) offset regimes appear to be a goldmine for companies willing to game the system. And if that's not enough to scare you then consider this: the same companies that brought you the greatest financial crisis since the Great Depression are salivating for a chance to start playing in the carbon market. Consider yourselves warned.

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