Carbon Offset, Carbon Credits — How to Buy a Clean Conscience


Jeff pine forestHave we outsourced global warming? Critics of cap and trade systems or carbon offsetting have argued that buying a carbon credit is like a medieval indulgence. Rather than saving the planet, it allows me to buy a clean conscience. I’ll give two examples of how this might be true.

Lets say I want to have no carbon emissions. The average American produces 20 metric tons of carbon dioxide a year. Rather than reduce by 20 tons I just buy 20 credits.

Those 20 credits might represent 20 tons of carbon that have been sucked out of the air by fast growing trees. Or do they? What if those trees would have been planted anyway? Then I’m just spending some money to keep polluting — and the world keeps warming.

Even worse. I buy a carbon neutral product. Which might cost a bit more than the alternative.  These are tough times, so everyone else is buying the other product (maybe buying it more than they would otherwise, to save the extra cost), which is conveniently produced in China, where there is no cap on emissions. So while I’m reducing my emissions, those very same emissions are just happening overseas. And the world keeps warming.

The first case, paying for trees that would have been planted anyway, is defined in the carbon market lingo as a problem of ‘additionality’. The second, moving high emissions around the world is called a problem of ‘leakage’.

A report by the European NGO Sandbag argues that “ major European polluters are buying their way out of making big cuts to greenhouse gas emissions.” This thwarts the EU cap, and may not even slow emissions — if those credits are not additional.

A report by the Carnegie Institute of Science found that the EU is pushing about one third of its emissions to poorer countries like China and India. In the shocking case of Switzerland, the Swiss are producing more emissions outside their country than within their borders. The US is outsourcing 11 percent of its emissions. Carbon emissions are leaking out of Europe and into the developing world.

Carbon markets didn’t discover additionality and leakage in 2010. These have been problems since the birth of the system, and every credit that is issued must be evaluated on those criteria by the United Nations Clean Development Mechanism Executive Board before being issued. Hardly a perfect system, but the challenges aren’t new. They’re just hard. And made harder when the same entity designs an offset project, pays verifiers to approve it, and then gets the carbon revenue from that project.

To avoid conflicts of interest, different entities should write the rules, certify the rules, certify the project, and earn the carbon revenue from a project. Voluntary markets are leading the way on separating these diverse stakeholders– so if you decide to offset your plane ride with Terrapass or some other carbon offset provider, ask them the hard questions. Our planet thanks you.

Article by Eliav Bitan appearing courtesy Celsias

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.