7 Responses to Rip-offset price crashes: Finally you can get nothing for nothing
Rip-offset price for a metric tonne of CO2 on the Chicago Climate Exchange.
For many years, I was the go-to scientist for the media when they wanted a quote dissing hydrogen cars, thanks to my book, The Hype About Hydrogen. Now that hydrogen is fading faster than the Y2K bug, I get more press calls on the next big green scam, rip-offsets (see “Question from WSJ blog: Are Bogus Carbon Offsets Really That Bad?“).
Case in point: “Landfills generate ‘green’ cash in northern Utah” in last week’s Salt Lake Tribune.
Weber County and Wasatch Integrated Waste Management System not only make money by turning methane gas generated in the trash heaps into electricity, they’re also selling carbon offset credits on the Chicago Climate Exchange….
While energy and environmental activists applaud such efforts, some are not so enthusiastic about the markets, like Chicago Climate Exchange, that let those curbing emissions trade on their own good deeds.
I am the unenthusiastic “some” here:
One, Joseph Romm, a senior fellow at the Center for American Progress and author of the book Hell and High Water: Global Warming — the Solution and the Politics — and What We Should Do, calls them carbon “rip-offsets.”
He doesn’t like that the Chicago Climate Exchange rewards companies or governmental agencies for past greenhouse-gas reductions.
“If I’m going to put up money, I want my money to go to a project that wouldn’t otherwise happen,” Romm said.
He also believes there isn’t enough scrutiny of the projects that earn the credits, likens the market to the mortgage-backed securities market now in shambles.
“The offset business is unregulated and voluntary, and it doesn’t take a genius to see unregulated markets tend to attract a lot of dubious players,” said Romm, who is also editor of the Web site www.climateprogress.org.
Always a nice thing when the media quotes you at length and accurately.
Still Wasatch’s Executive Director Nathan Rich defends the way CCX does business:
Rich also defended the market’s practice of rewarding credits for past good work.
“What’s wrong with rewarding people for good behavior?” he said.
There’s nothing wrong at all with rewarding people for good behavior, Rich. But there is something wrong with calling that an offset and taking money from people who think that their money is going to something new, something additional. For an excellent piece on this subject, see Mark Trelxer’s, “Why Do You Focus So Much on Additionality in [your] Report for Clean Air-Cool Planet on Retail Offset Providers?”
In fairness, Gary Laird, the county’s solid-waste manager, did claim the project was additional:
Although Wasatch didn’t expect to make a bundle of money, selling carbon offset credits can help new green projects pencil out, he said.
Laird said the sale of carbon credits was part of Weber County’s calculation all along.
“This was what made our project feasible,” he said.
Very easy to say after the fact, especially since, after all the bad press, I have little doubt CCX project developers know they ought to say that. Maybe it’s true, maybe not. Like I always say about rip-offsets, caveat emptor. Or is that, caveat empty?
Interestingly, the rip-offset market price has collapsed:
Laird sold at the top of the market, when carbon credits were worth $6.30 to $7 each. Friday on the Chicago Climate Exchange, the credits were down to $1.95 each….
So now, finally, you can get
something nothing for nothing.
- CCX sells rip-offsets: “It seemed a little suspicious that we could get money for doing nothing”
- Is the Chicago Climate Exchange selling “rip-offsets”?
- GAO rips rip-offsets: “The use of carbon offsets in a cap-and-trade system can undermine the system’s integrity.”
- You can call a rip-offset a CDM project, but it’s still a rip-offset