Is the Chicago Climate Exchange selling “rip-offsets”?

I’m going to (try to) coin a new term here, “rip-offsets,” since I can’t think of a better word for the rip-off offsets the Chicago Climate Exchange is peddling to a gullible public and media.

The Washington Post has a front-page story, “There’s a Gold Mine In Environmental Guilt Carbon-Offset Sales Brisk Despite Financial Crisis,” that echoes articles written a few years ago on the mortgage industry. Sales are way up. Price are rising. Everybody is jumping in. Oversight all but nonexistent.

Yeah, a few of those pesky “Watchdog groups say offset vendors sometimes do not deliver what they promise,” but for most people it’s just one big party:

At the Chicago Climate Exchange, where offsets are sold like pork bellies or stocks, Sept. 23 was the second-busiest trading day in the four-year history of the market.

Buried at the very end of the article is a description of just how worthless many Chicago Climate Exchange offsets are. The article describes an offset so pathetic, so questionable, that it shocked even me, and I already thought most offset are no better than mortgage-backed securities:

In the western Virginia town of Christiansburg, the operators of a landfill sell carbon offsets tied to a project that captures methane, a powerful greenhouse pollutant, and burn it in a tall orange flare. They’ve made $43,000 on the Chicago Climate Exchange in just a couple of months.

But that project was put in long before the offsets were sold and for a different reason: to keep dangerous gases from accumulating in a capped landfill. So if the offset market dried up completely?

Nothing would change.

The money “is gravy to us right now,” said Alan Cummins, executive director of the regional authority that runs the landfill. Even without it, he said, “we would always continue to flare.”

I was trying to come up with a better word than fraudulent to describe such an “offset,” and “rip-offsets” is what came to mind, since this has got to be the biggest climate rip-off since China crashed the Clean Development Mechanism party with its own brand of fraudulent offsets that don’t offset anything.

People are actually paying the Chicago Climate Exchange tens of thousands of dollars to pay this landfill to keep doing what they would do anyway — and what they are doing anyway isn’t even particularly good for the environment.

Yes, flaring methane is better than emitting it into the environment; methane is 20 times as potent greenhouse gas as the carbon dioxide you get from burning methane. But flaring landfill gas is a pretty lame idea. Heck, this January, an entire new organization,, was founded solely for the purpose of stopping the entire practice worldwide by 2020. The whole point of extracting methane from landfills is to use it to make useful heat or electricity or both. Offsets have so little utility in the real world that if your money isn’t in some tiny way helping to jumpstart the transition to a clean energy economy, then the whole thing is just a joke.

Talk about burying the lede.

What makes this story particularly disturbing to me is that Fahrenthold wrote a front-page story for the Post earlier this year that explained at length just how dubious offets from the Chicago Climate Exchange are (see House carbon offsets “a waste of taxpayer money”). And he coathored a front-page story last year on how dubious other companies’ offsets are, where many climate benefits “are only estimated, extrapolated, hoped-for or nil” or would have happened anyway (see here).

The bottom line: The vast majority of offsets are, at some level, just rip-offsets. Spend your money elsewhere.

13 Responses to Is the Chicago Climate Exchange selling “rip-offsets”?

  1. I remember years ago, reading in the jobs section of (I think, the Financial Times – anyway in a European news site) of joblistings such as Carbon Offsets Auditors, and it seemed like almost like reading a newspaper from the future, a job in a future that we have not fully entered yet here in the US…

    Clearly it is time for us to join them in that future. Methane is such a valuable and even already utilized electricity source that there is absolutely no reason to pay anyone to have it thrown away!

    Did you contact the Chicago Climate Exchange?

  2. I really dislike the guilt idea though (that eco-penitents are just being taken for suckers: yew just get in yer SUV like an honest Murkin)

    Because offsets can provide funding sources to increase our supply of wind farms and so on: they are useful. They just need to be better monitored by carbon offset auditors – even accountants are needed in the green-collar job bonanza!

  3. Larry Coleman says:

    Joe, while I agree that burning the methane is sort of crazy, I don’t see it nearly as bad or nonsensical as you do. After all, capturing and burning the methane is 20 times better than capturing and storing (or avoiding the emission of) an equal amount of CO2, which would be a obviously good offset. Twenty times!

    And the fact that they would be doing it anyway is a red herring if in fact the offset encourages others (who are not doing it anyway) to do so.

    [JR: Red herring? It is called “lack of additionality” and the vast majority of people would consider it fatal to an offset. After all if I’m paying you to do something that you were already doing and we’re going to do anyway, then I’m not offsetting anything. I’m just making a charitable donation.]

  4. Larry Coleman says:

    JR: Red herring? It is called “lack of additionality” and the vast majority of people would consider it fatal to an offset. After all if I’m paying you to do something that you were already doing and we’re going to do anyway, then I’m not offsetting anything. I’m just making a charitable donation.

    No, Joe. (Geez! I thought I said it clearly but obviously not.) In life we OFTEN – meaning, almost always – have to accept the not-go-good with the good. Or as we say, not let the perfect be the enemy of the good. If the offset market for capturing landfill methane causes a lot of methane capture that would have not otherwise been captured, it is NOT a case of “lack of additionality.” Even if there are some cases where there is no additionality. You are being too idealistic.

  5. David B. Benson says:

    Good lord. Surely they could find somebody to use the methane to generate electricity?

  6. Alyssa says:

    come on yall stop thinking bout politics and worry bout the damn enviorment……………………………………………put whats important first…use your heads…

  7. Angela says:

    Joe, you’re so right and I’m jumping on the “rip-offsets” bandwagon!

  8. Jason says:


    Offsets are inherently dissatisfying because you can’t prove additionality. You’re right to point out that some offsets are just flat-out fraudulent, while others are of dubious quality. However, there are also a variety of decent offsets–energy efficiency projects, renewable energy projects, co-generation projects that are made viable by offset income.

    You have to parse out whether your difficulty is with offsets, or with the offset market. The latter is really the problem I think you’re upset with–that consumers don’t know what they’re getting. I worked at GAO recently, and they released a report a couple months ago about what you’re getting (or not getting) when you buy voluntary offsets:

    So indeed, take issue with that. As for offsets themselves, yes, quality is compromised in a lot of ways. The solution is not to do away with them, but rather to change the terms by which we generate them–for example, limiting project types theat are eligible, or moving to sectoral benchmark assessment instead of project-by-project basis.

  9. Stephen Balbach says:

    “The bottom line: The vast majority of offsets are, at some level, just rip-offsets.”

    Really? What does “vast majority” mean? 51%? What does “at some level” mean? This is just polemical rhetoric based on one extreme example. How about a balanced overview first, then we can discuss “bottom line”.

  10. Joe says:

    Vast majority means 90% of those sold in this country. Read the links, including my earlier posts.

  11. Joe – many thanks for the term rip-offsets, which the International Rivers climate team has now wholeheartedly adopted. See

  12. Luc says:

    Dear all,

    From a European perspective, this American discussion on climate change looks new to me. May be was I ignorant but I have got the feeling that the election of Obama has opend the door to a new American policy to climate change.

    By chance, Europeans have come on that subject a little bit earlier. That is why we have some more experience in that. May be, since I have been working on that subject for a while, could I give some advice.

    First, the words “global warming” look to me dangerous. In some areas, climate change will create indeed global warming. In some areas, it will be the opposite. Better to use appropriate wording to get sounder trust.

    Second, I guess that the European experience could help the US to deliver quicker. Climate Change will probably force us to change some aspects of our ways of life. See for example that funny cartoon found on You Tube

    Hope it will help