"Question from WSJ blog: Are Bogus Carbon Offsets Really That Bad?"
Joe Romm at Climate Progress calls them “rip-offsets,” and bemoans the fact that people get paid extra for business as usual activities and that companies buying the offsets are wrapping themselves in a non-existent green cloak.
But are offsets really so bad? One of Mr. Romm’s readers says not to let the perfect be the enemy of the good. Some individual projects, like the New Jersey landfill profiled in the WSJ, might not provide “additional” emissions reductions. But if the carbon-offsets lucre encourages smaller, unregulated players to change their behavior, it’s not such a bad thing overall:
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.”
This isn’t a wonkish point. For climate-change legislation to pass Congress in the midst of an economic crisis, everybody from environmentalists to big business has to be on board, and businesses say they need access to cheap emissions reductions provided by the offset market.
It just goes to show you that a good comment on this blog can get you into the Wall Street Journal — congrats to Larry Coleman.
I definitely think the perfect should not be the enemy of the good. But the phony should be the enemy of the genuine [Note to self: With that attitude, you’re never going to get a job in Hollywood or in a GOP political consulting firm].
The problem with the WSJ/Coleman critique is that, as my lawyer friends might say, it assumes facts that are not in evidence. If the Chicago Climate Exchange or anybody else can find a landfill that was not capturing its methane but that needs the money from the offset market to make methane capture profitable, I say go for it. But where is the evidence that fraudulently charging Americans for projects that are supposed to be offsetting their emissions but in fact aren’t offsetting anything has caused methane capture that would not otherwise have occurred?
This isn’t a wonkish point. If climate legislation requires rip-offsets to be passed, and if the entire point of climate legislation is to reduce emissions and avert catastrophic climate outcomes, then offsets that are not real are merely enabling a system whereby coal companies can keep burning coal and then pay people to do stuff they were already doing. The net result — emissions keep rising.
I don’t keep repeating every single criticism of rip-offsets in every post — that is what hyperlinks are for. But let me repeat the central point from the major Stanford study this year done on the specific question of what happens if you allow rip-offsets to be used as a major cost-containment strategy in climate legislation (from my post “Q: What is the difference between carbon offsets and mortgage-backed securites?“)
At a policy level, offsets 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 large scale, offsets are probably worse than mortgage-backed securities, because even if the mortgages are underwater, you know the houses aren’t valueless. But as a major 2008 analysis from Stanford found
… “between a third and two thirds” of emission offsets under the Clean Development Mechanism (CDM) — set up under the Kyoto treaty to encourage emissions reductions in developing nations — do not represent actual emission cuts.
And this led to the study’s stark conclusion:
… any offset market of sufficient scale to provide substantial cost-control for a cap-and-trade program will involve substantial issuance of credits that do not represent real emissions reductions.
Talk about your sub-sub-sub-prime loans.
This is NOT a case of the perfect being the enemy of the good. It is a case of phony emissions reductions being the enemy of geniune emissions reductions.
And let me repeat a point specifically about methane. Methane offset projects that genuinely meet an additionality test aren’t a bad idea, and their benefits are certainly easier to verify than many other offsets. But that is in some sense precisely their problem. Once there is a hard cap on carbon emissions and a trading system, all those cheap, easy to verify methane-saving projects will be the first projects funded. So paying good offset money to fund methane offsets now mainly just accelerates some inevitable projects a few years. Also, from my perspective, one of the few overarching benefits of funding offsets is jumpstarting the transition to an economy built around energy efficiency and renewable energy. Most methane projects don’t do that at all.
I’d also add that many other offsets the CCX sells are equally dubious, such as like low-tillage agriculture (see “No-till farming does NOT save carbon and is NOT a carbon offset“) and tree planting (which even offset seller Terrapass disses) and renewable energy certificates (see “Schendler Part II: Good RECs vs. Bad RECs“).
The WSJ blog ends by asking:
I think that is the wrong question framed the wrong way. This isn’t about passing some political correctness test for environmentalists. And I for one am not an environmentalist. The right question is
Are there enough offsets that represent real emissions reductions to justify their inclusion as a major cost-reduction strategy in climate legislation?
The answer to that question should be the same whether or not you are an environmentalist — and right now it appears the answer is no.