I don’t normally endorse individual companies. But I have long thought European allowances were the best alternative to offsests and am delighted someone has made a business out of it.
The business opportunity is clear — offsets suck. At a policy level, they can destroy the environmental value of climate legislation (see “Boxer bill update: Probably no U.S. CO2 emissions cut until after 2025” and “McCain speech, Part 2: Relying on offsets = Rearranging deck chairs on the Titanic“).
At a personal level, lots of vendors are selling very dubious offsets, including CCX (see here and here and here). I can’t imagine why you would waste your money on the most popular offsets, trees (see no trees and certainly not a Northern forest — heck, even offset seller Terrapass disses trees). And don’t get Climate Progress started on the other popular offset, RECs (see “Schendler Part II: Good RECs vs. Bad RECs“).
But I know some of you out there really want to be carbon neutral, and while you have bought 100% renewable power for your superefficient home that uses a geothermal heating and cooling system to replace natural gas, and you bought a Prius for the family car and you telecommute, you just haven’t figured out how to avoid some driving and flying.
What to do? Buy real emissions credits from the European market and retire them permanently! Now that is the best idea since solar baseload.
Here is an article on Carbon Retirement, which launched on July 15. Now obviously European allowances are much more expensive than offsets — but that is the whole point. Offsets are like junk bonds or perhaps more appropriately subprime loans. European allowances are the real deal.
Yes, I know you are concerned that Phase 1 of the European emissions trading scheme didn’t go well. But in fact, it really didn’t go that badly (see “Lehman on the European Union Emissions Trading Scheme“). But in any case, Phase 1 was pre-2008 and thus was a trading scheme without a hard emissions cap, which is like a peanut butter and jelly sandwich without the bread — a mess.
As Carbon Retirement explains:
The price of Phase 1 EUAs dropped when analysts realised in spring 2006 that European governments had allocated so many allowances that the regulated industries did not have to make reductions. This was because the allocation plans were based on estimates of emissions, rather than audited measurements.
The allocation plans behind Phase 2 are based on extensive and credible measurement of the industries’ emissions, and the industries within the scheme will have to make emission reductions. This is why the price of Phase 2 credits remained strong when the Phase 1 credits collapsed. Independent analysts have recently assessed the allocation for Phase 2 and forecast that credits will be scarce.
Actually, their entire website is incredibly informative and explains why buying and retiring European allowances is infinitely superior to
wasting your money on buying offests:
- All Carbon Retirement offsets are additional
- Carbon Retirement offsets are accurately measured
- Carbon Retirement is based on European industrial efficiency
- There is no risk of double counting
- The reduction in emissions is permanent
- Carbon Retirement delivers cost effective reductions
Here are all their FAQs:
- How is Carbon Retirement different to other types of offsetting?
- Can I pay in a currency other than British Pound Sterling?
- What is the EU Emission Trading Scheme?
- What is an EUA?
- How is the price calculated?
- Why does the price of EUAs change?
- Where do you buy EUAs from?
- Why do different offsetting companies charge different amounts to offset the same thing?
- Project-based offsets often have social benefits. Are there any social benefits to taking EUAs out of circulation?
- How does your calculator work?
- Could Carbon Retirement end up buying all the credits, leaving industry with no rights to pollute?
- There were some difficulties with Phase 1 of the Emission Trading Scheme. Are these likely to be repeated?
- What’s the difference between a Certified Emission Reduction (CER) and an EU Emission Allowance (EUA)?
- Where can I go to find out more about climate change and the EU Emission Trading Scheme?
Kudos to Dan Lewer, who founded this company at the age of 25.