Is the Media Waking Up to the Trouble With Offsets?


Photo via World Land Trust

While they are often cited as a way to keep costs down, carbon offsets--particularly forest offsets--present a number of problems for a world that wants to mitigate the effects of climate change. In the past few weeks, a number of those problems have received significant media attention.Forest offsets and the mafia? Maybe, says Interpol. In Bali last week, Interpol environmental crime official Peter Younger told Reuters that he expects "fraudulent trading of carbon credits," as organized crime figures out how to game the system of forest carbon trading. At issue, really, is accreditation, meaning which projects will be deemed a legitimate offset project. With so many governing bodies involved and billions of dollars available in the market, the system is ripe for corruption.

The LA Times picked up on the potential fraud story and ran an article talking about a potential carbon market in California. Writes Margot Roosevelt:

But the carbon commodity business is controversial. Critics fear that poorly regulated offsets could hand a get-out-of-jail-free card to heavy polluters. Should a coal-fired power plant in Nevada avoid slashing carbon dioxide emissions by paying to preserve trees in Oregon? Is this a complex trading scheme ripe for fraud?

To create trustworthy offsets, California's Air Resources Board two years ago set up the nation's first government-sponsored system to quantify and verify carbon. Those rules are being rewritten for possible use by other states.

"Companies having a hard time meeting their carbon emission limits may want to invest in forestry as a way to cut costs," said Mary D. Nichols, the board's chairwoman. "We have hundreds of thousands of acres of forests that can play a role in helping us to prevent global warming."

Offsets in Waxman-Markey
This legislation leaves the door wide open for forest-based domestic and international offsets to take the place of real action. Offsets through the planting of trees in non-forested areas or areas that have recently been forests, for example, have attracted lots of attention through the Clean Development Mechanism (CDM) of the Kyoto Protocol and other voluntary carbon offset schemes. For a power utility, these projects would be relatively cheap and plentiful in comparison to other climate initiatives like taking a coal plant offline in favor of a zero carbon wind farm.

Measuring the exact carbon savings of an offset project is a hard task. Under current proposed legislation, the EPA, which will be advised by an independent nine-member Offsets Integrity Advisory Board, will decide what agriculture and forest projects make the cut. Current legislation allows for 2 billion tons of offsets per year. That is a lot of offsets for one board to vet.

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