Carbon Offsets Not a Mirage Post 2

Last week I posted in response to an article in the Washington Post by Laurie Williams and Allan Zabel entitled Cap-and-Trade Mirage.

I countered their contention that employing cap and trade would not result in the required emissions reductions to get us started down the path to a low-carbon economy. They opined that cap and trade would not jumpstart a revolution in renewable energy; I countered that it would spur efforts in energy efficiency, which represent a significant untapped opportunity.

The larger point they made in the op-ed was that the inclusion of carbon offsets in the proposed climate legislation in both the House and Senate would "guarantee failure" of the bills. That's a pretty strong contention: "guarantee failure." I could not disagree more, and I am supported in this opinion by Dan Lashof, director of the climate center of the Natural Resources Defense Council.

Here's a quick primer on carbon offsets:
Carbon offsets represent emission reductions that occur in one place but are credited somewhere else, generally because they are paid for by the entity in the "somewhere else." For instance, landfills that are not required to capture the methane their waste produces as it decomposes generally will vent that methane (a potent greenhouse gas), because it's cheaper than putting in place the technology to capture it. However, an outside investor could help finance that technology in exchange for the emissions reductions that will result. Those emissions are "carbon offsets," and they can be used to "offset" emissions reductions that would otherwise be required by the financing entity.

It is easy to find criticisms of carbon offsets. Some people have compared them to Medieval Indulgences--just a way to assuage guilt. Others, including Williams and Zabel, claim that they don't actually result in any emissions reductions because of "additionality" problems or poorly designed or regulated projects. Both of these are issues worth addressing, but they are wrong that these issues will result in failure. On the contrary, by instituting strong offset provisions, these bills will accomplish more emissions reductions faster while potentially helping to build momentum for greenhouse gas reductions across the economy.

Let's take "additionality" first. What is "additionality?" Simply, it's the term used to describe whether a project would have happened anyway. . ."additional." This is a simple idea, but fairly difficult to pin down in any particular circumstance, since it requires the ability to know what would have happened instead. In many cases, that might require mind reading. The fact that additionality is difficult to know perfectly does not mean that every project is worthless or that it's not possible to make intelligent judgments. Quite the opposite, in fact. Every carbon offset certification organization has well thought out additionality requirements.

While I was at we partnered with a not-for-profit organization called Paso Pacifico on a project that was certified by the Climate, Community and Biodiversity Alliance (CCBA), called Return to Forest. This project is about as additional as one can imagine. Former pastureland that was lying fallow was restored to forest through carbon offset financing from's donors. Without this funding, the forests that are growing there now would not exist. They are "additional;" they could not have possibly occurred otherwise. Better even is that CCBA has additional requirements to benefit local communities and biodiversity. So this project, which was financed through carbon offsets, provides significant ancillary benefits at no additional costs. CCBA, as well as other certifying organizations, also has strict requirements to make sure plans and finances are in place to manage projects for decades into the future.

I personally like forestry projects even though there are dissenting views on this subject--even from other environmentalists (like Joe Romm). My reasoning comes down to one simple idea. Half of all the forests that existed 8,000 years ago are gone. We have to put them back as one of the key strategies in our battle against climate disruption. We have to put them back. If carbon offset financing helps us do that (and it does), then let's go! If we're worried about permanence (they might burn down or be killed by disease), we can compensate by underestimating the climate benefits for each project such that in total the climate benefits are still better than originally estimated. (Also, project insurance--which doesn't really exist yet--could help overcome this issue.) Listen, no one is investing the kind of money needed to reforest the planet on the scale required just through charitable efforts or even national and international government investments. Well designed carbon offset schemes can help.

Return to Forest is just one example of a project that is clearly additional. Additionality can be somewhat subjective and has been the topic of much debate for years in offset circles. That's why offset certifying organizations have worked so hard to put in place additionality requirements. Perhaps they are not perfect, but by dealing with this issue, they have helped solidify confidence in the markets for carbon offsets.

I used a forestry example, but projects of all types can meet additionality criteria. In fact, Joe Romm himself, who has generally been against most offset schemes, comes out in favor of offsets in Waxman-Markey, because they meet both additionality issues and are fraud resistant.

Which is the other issue Williams and Zabel bring up. They point out a couple of examples of dubious projects that don't actually reduce any emissions or are fraudulent. Well, sure, I can find examples of fraud everywhere, but that doesn't indict the entire system. Just because some bad mortgage loans were made doesn't mean we scrap mortgages entirely as a way of financing homes. No, we just improve our systems to reduce the problems and keep the benefits. Same with offsets. Williams and Zabel say that these problems "cannot be solved by certification or verification processes." They offer no evidence of that; they just baldly assert it. Well, I can say au contraire--we have the tools to overcome issues of fraud, measurement and additionality, and they are already being used in the offset markets and are continuously being improved.

So I must respectfully disagree with Williams and Zabel. Offsets will help meet our reduction targets at lower costs while also putting money towards a wider variety of projects and strategies than would occur without them. Insomuch as international offsets are also allowed, that will help spur investment in other places in the world, too--which is a good thing for fighting climate change.

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