The biggest loophole in cap-and-trade systems, and greenhouse gas emission reductions more generally, is offsets. These are payments by those who produce GHG emissions for projects that reduce emissions somewhere else, so as to neutralize the originating emissions. Offsets have been criticized for not being easily validated – for example, by virtue of investments made in other countries, where outcomes cannot easily be monitored or guaranteed over time (like planting trees that may not live, may be subsequently cut down, or may be lost due to fire), or where they pay for projects that would have happened anyway.
But it is worse than that. Ultimately, we cannot offset our way out of making real emission reductions. Consider BC. According to the latest National Inventory, in 2007 BC’s greenhouse gas emissions totalled 63.1 million tonnes of CO2 equivalent. Through the magic of offsets, if we are able to reduce greenhouse gas emissions elsewhere by that same amount, then we are considered to be carbon neutral. So rather than pay out the revenues of the current carbon tax of $10 per tonne in tax cuts, we could simply pay $631 million (assuming our current emissions are the same as 2007) for someone else to reduce emissions outside BC. Even at a price of $25 per tonne, which is what the BC government is paying into a Pacific Carbon Trust to make government “carbon neutral”, it would only cost just over $1.5 billion – “only” in the sense that this is less than one percent of BC’s GDP.
Pretty cheap, really, and that is why offsets are so silly. BC would still be emitting 63.1 million tonnes into the atmosphere. While I can see some rationale for offsets in the short run to kick start projects that would not have otherwise occurred, they only work on a small scale and only for a limited time. The BC case, if generalized, illustrates that we could not offset all global emissions through offsets. At some point, households and industries need to make real emission reductions.
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- Why the City of Vancouver should divest from fossil fuels (October 9th, 2013)
- What UBC and SMU’s rape chant scandals say about women in the Canadian economy (September 10th, 2013)
- Linda McQuaig for Toronto Centre (August 6th, 2013)