Offsets Bad!

© 2010 Joshua Stark

My favorite weekday radio program, Marketplace, reports on offset problems in Brazil. This report adds another problem to the "offsets" concept.

First, a quick definition of "offsets". In a carbon pricing mechanism, government first caps the total amount of carbon allowed, then allows a price to be set for the remaining carbon. In it's most simple and fairest form, this price is set through a government auction of the carbon permits. An offset is a project or action that a company can take that will pull as much carbon out of the atmosphere (called "sequestering") as it is polluting beyond its permits.
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Theoretically, a company would buy a certain number of carbon permits, and if it couldn't cut its carbon pollution to a level below its permits, it would then purchase something that would sequester the carbon above its permitted level.

Examples of carbon offset projects include forests and solar panel projects that replace fossil-fuel generation.

I have written about my dislike of offset projects (look here, for example), and I think this post's title sums up my thoughts pretty succinctly. It isn't the idea in and of itself that offends, but the downstream potential for slacking-off in monitoring its effectiveness, the potential for gaming an already-complex system, and the impacts on co-pollutants that bothered me so much.

A few months ago, my wife asked another vital question: What will these incursions on wildlands have on the people who live there? She had her doubts about these projects, too. Marketplace gave one answer, and you can add that problem to my list of reasons to disapprove of offsets.

Offsets highlight a major problem in our political system: regulatory oversight, both by actual regulators, and also by non-governmental entities. Government regulatory oversight, especially around politically hostile topics like the environment, is often, ironically, irregular. Political powers shift, sometimes within the same administration, and leadership positions within regulatory agencies are often seen as rungs on a ladder, rather than places where permanence and stability are desired.

In addition, the hard slog of maintaining a regular presence at agency meetings and in regards to regulatory measures is very difficult for private individuals and non-profit organizations. The Next Big Bill in the legislature or Congress is far sexier to both media and donors, and nonprofits, like everybody else, are constantly forced to reconcile their hours with their budgets.

Offsets add problems and complications to any carbon-capping mechanism we choose. If international, how can we trust in compliance? If national, how can we trust in regulatory consistency? Plus, if the forests are seen as carbon stands rather than complex systems, how will the ensuing piles of money impact other services we get from these places? (I've written about the impact of pricing carbon benefits in European forests here.)

A major problem the environmental justice community has with carbon offsets concerns major polluters. It so happens that the biggest carbon polluters are also the biggest emitters of other pollution, pollution much more harmful to folks adjacent to the facilities. These companies will also have the hardest time curbing their carbon emissions, and will lean on the offset crutch, buying rights to an Amazon rainforest, instead of installing pollution-reduction equipment at home.

And now we are finding out that the long-term implications for carbon offset projects in that same rainforest can also negatively impact folks living in them.

Offsets bad!