Making BC carbon neutral (the lazy way)

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.

2 comments

  • I don’t think there is anything inherently wrong with offsets. Of course they have to verified.

    If only BC was reducing their carbon output, doing it all with offsets could work. However the whole world needs to be reducing their carbon output, so if everyone tried to do it all with offsets where wouldn’t be enough supply to meet demand and price rise, making emissions reduction cheaper.

  • I’m also not too worried about this. Think of planting a bunch of trees on several hectares of unused land. If the investment money is coming from a smokestack industry somewhere on earth, and the carbon output from the smokestack equals the carbon being sucked out by the trees, then this could factually be sustainable.

    The real problem is that it is an unregulated honour system operating in a wild-west business environment. But if there were a certification process, it was locked into cap-and-trade vouchers, and it actually bears fruit, then there would be no problem.

    I think we need to accept that new lines of business will always have that wild-west feel about it, and there will be some gaming of the system. But a decade later, after a bubble collapse and a few arrests and lawsuits and some government intervention, it could work perfectly fine, and would start to resemble other mature industries. Of course the onus is on the left to unionize, tax, regulate, and/or nationalize, and if there is no effort to do so, this would become yet another $X billion added to GNP that lacks any connection to progressive values, as happened with the internet. And then it’s simply “another decade, another nudge to the right.” And that’s the real issue, isn’t it?

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