CARBON OFFSETS SCAM

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While much media attention has been paid to “cap-and-trade” schemes as a way to prevent global warming, there is a second path to “global warming” salvation — carbon offsets. But it’s all just smoke and mirrors, says Sterling Burnett, a senior fellow with the National Center for Policy Analysis.

Under a carbon offset scheme, a country (or company) can meet its emission targets by paying others to reduce their emissions. To facilitate this process, the United Nations created the Clean Development Mechanism (CDM), an international market where buyers who need to offset their emissions can purchase carbon credits from developing countries.

Unfortunately, proving that emission cuts are reductions that wouldn’t have occurred absent the offset payments is proving difficult, says Burnett:

* Almost three-quarters of CDM registered projects were already complete at the time of approval, and thus, didn’t need carbon credits to be built.
* An estimated 40 percent of CDM projects registered by 2007 represented “unlikely or at least questionable” emission cuts.
* Between a third and two-thirds of CDM offsets don’t represent actual emission cuts.

And even when CDM certified projects do cut greenhouse gas emissions, the system is inefficient, says Burnett:

* Nearly 30 percent of carbon offset credits currently pay for capture and destruction of trifluoromethane (HFC-23), a greenhouse gas byproduct of manufacturing refrigerant gases.
* The carbon offset credits that sold to reduce HFC-23 at current demand are twice as valuable as the refrigerant itself; HFC-23 emitters could receive as much as $7.15 billion from the sale of carbon offsets through the CDM.
* By contrast, if companies paid plants directly, the cost would be less than $155.4 million.

It’s debatable whether Congress should even take up climate legislation. However, if Congress does act, it should be skeptical of the merits of carbon offset schemes, warns Burnett.

Source: H. Sterling Burnett, “Carbon offsets scam,” Washington Times, March 8, 2009.
Why not include a provision in the U.S. carbon trading system that allows U.S. companies to gain carbon credit for offsets in Latin America? After all, if the Amazon goes, the climate shifts will hit the United States almost as hard as Brazil, Peru and the other Amazonian countries. Things that drive climate — like atmospheric convection and surface temperatures — don’t exactly respect political frontiers.

Under Cleary’s proposal, most of the revenue from a US cap-and-trade plan would go to US taxpayers. The White House estimates that cap-and-trade would raise $646 billion from 2012 to 2019, a prediction that some analysts say is actually on the low side.

A portion of this money – Cleary doesn’t get into exactly how much – could be channeled to fund projects in Latin America, in particular ones that protect the region’s tropical forests, which limit global warming by trapping carbon dioxide.

Cleary makes an appeal to laissez-faire economics – using rhetoric uncommon among environmentalists:

The whole history of free trade in the Americas is built on the idea that the free flow of goods and services is in everyone’s interest. It would be nice to see that assumption of interconnectedness reflected more in U.S. environmental policy, and the coming U.S. cap-and-trade system would be a great place to start. [emphasis in original]

Sending even a portion of that projected $646 billion in cap-and-trade revenue abroad could be a hard sell to an economically distressed American public. But businesses could latch on to the plan because it’s almost always cheaper to fund a carbon offset project in the developing world than within US borders.