A convenient way of cutting industrial gases that warm the planet was supposed to be the United Nation’s clean development mechanism (CDM). As a provision of the Kyoto Protocol, the CDM enables industrial nations to reduce their greenhouse gas emissions in part by purchasing “carbon offsets” from poorer countries, where green projects are more affordable. The scheme, which issued its first credits in 2005, has already transferred the right to emit an extra 250 million tons of carbon dioxide (CO2), and that could swell to 2.9 billion tons by 2012. Offsets will “play a more significant role” as emissions targets become tighter, asserts Yvo de Boer of the U.N. Framework Convention on Climate Change.
But criticism of the CDM has been mounting. Despite strenuous efforts by regulators, a significant fraction of the offset credits is fictitious “hot air” manufactured by accounting tricks, critics say. As a result, greenhouse gases are being emitted without compensating reductions elsewhere.
The accounting is rooted in a concept known as additionality. To earn credits, a project should owe its existence to the prospective earnings from carbon credits: the emissions reductions from the project should be additional to what would have happened in the absence of the CDM. Hence, the developers of a wind farm in India that replaces a coal-fired power plant could sell the difference in carbon emissions between the two projects as offsets—but not if the wind farm would have been built anyway.
Many CDM projects, however, do not appear to be offsetting carbon output at all. The Berkeley, Calif.–based organization International Rivers discovered that a third of the CDM’s hydropower projects had been completed before they were accredited. Lambert Schneider of Germany’s Institute for Applied Ecology judged two fifths of the world’s CDM portfolio to be of similarly questionable additionality. Climatologist Michael Wara of Stanford University guesses the figure could be much higher, but, he says, “we have no way of knowing.”
Determining which projects are “additional” can be tricky, explains researcher Larry Lohmann of the Corner House, an environmental think tank based in Dorset, England. “There’s no such thing as a single world line, a single narrative of what would have happened without the project,” he points out. “It’s not a solvable problem.”
A related worry is that of perverse incentives. Consultants assessing a carbon-offset project often compare it with the accepted practice in the developing country where it will be located. Such an approach gives that country an incentive to take the most polluting line to maximize the credits they earn for a CDM project. Selling this artificially inflated credit could thus ultimately enable more carbon to be emitted than if the offset had not been created at all.
Take the controversy over gas flaring in Nigeria, where oil firms burn off 40 percent of the natural gas found with oil. The state-owned Nigeria Agip Oil Company plans instead to generate electricity from the waste gas of its Kwale plant, displacing fossil fuels that might otherwise have been consumed. That strategy would create credits of 1.5 million tons of carbon dioxide a year for sale. (A credit for a ton of CO2, called a certified emissions reduction, has been selling for about $15 in Europe.) The project is deemed additional because the prospect of selling offsets motivated the developers.
But activist Michael Karikpo of Oilwatch finds that classification to be “outrageous”—because routine flaring, which spews carcinogens such as benzene and triggers acid rain, is illegal in Nigeria. No company should profit from flouting the law, he adds: “It’s like a criminal demanding money to stop committing crimes.” Nevertheless, the incentive to declare a project as additional is powerful. Pan Ocean Oil Corporation, based in Nigeria, has applied for CDM approval for an effort to process and market waste gas from its Ovade-Ogharefe oil field. Should the government begin enforcing the law against flaring, it would render the project nonadditional and sacrifice considerable benefits.
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18 Comments
Add CommentThe article is correct. Auditing the process and ensuring that results are tangible is impossible. How would you trust some third world dictator who claims to be planting trees to comply, but also has no problem with genocide? Makes no sense.
Reply | Report Abuse | Link to thisThe fundamental issue is larger however; AGW is a scam so trying to create an audit trail to ensure that a scam is being properly implemented doesn't make any sense either.
The whole carbon offset is shallow and does not work in the real world. It only allows large corps to keep doing the same thing and create a new marketplace for people to make money (and not the ones in the third world).
Reply | Report Abuse | Link to thisI agree with the above comments and the article. The whole concept of offsets seems flawed to me. I feel similarly disillusioned with the cap and trade proposals being talked about. They seem ripe for corruption. If you want to reduce carbon dioxide generation, tax it. That will surely change behavior.
Reply | Report Abuse | Link to thisTo throw one's hands up in the air in despair and say that the first real action on climate change is doomed is not really productive. Yes, any system that does not reduce carbon emissions to zero immediately can be said to be flawed in some way, but nobody is going to agree in principle to do that.
Reply | Report Abuse | Link to thisWhat carbon trading does is establish and enforce a financial aspect to polluting, something that no polluter would willingly do. The limits on carbon emissions have to start high and the costs low to get the framework in place. Then, over time as technology advances and corporations and individuals learn how they can make money off of not polluting, then these limits get gradually adjusted. We should not despair that third world countries initially make money off of offsets or they don't have the same restrictions that we do. Right now they aren't the problem and if we want them to not emit as much per capita as we do, we have to pay them not to or sit back and watch the air get a lot worse.
Yes the system is flawed, but unless there is an alternative in place that everyone can agree to then nobody should even talk about scrapping what is in place. Don't worry about the exceptions and deficiencies until after the carbon economy is established and we can work on improving things. We've got to start somewhere.
Shoshin, Could you share your proof? This would be some pretty big news if you have proof that global warming hasn't been caused by man's activities at all! If that were the case then we could all be comfortable burning our garbage, driving gas hogs and generating our electricity using coal. Unfortunately though, knowing that we released half of the CO2 that was sequestered by nature in the form of oil alone makes that contention seem ludicrous. Isn't it much more likely that corporations would be the ones pushing for a conclusion (The one that wouldn't cause them potential liability, no AGW) than it would be for scientists? What do the vast majority of scientists have to gain by studying the situation and coming to the conclusion that AGW is happening? Akums razor.
Reply | Report Abuse | Link to thisThe AGW supporters have government grants to gain. The government has your dollars to gain. Are you so simple that you can't see this. Cap and trade is a carbon tax that will transfer an enormous amount of wealth to the government that will wreck our economy. The government will then reward those who agree with further grants.
Reply | Report Abuse | Link to thisIf you truly want to limit carbon you will set up a regulation/plan to limit emissions just like we do other gasses. It can be phased. What would be wrong with that? Directly limit the problem versus a convoluted indirect plan that would be full of corruption.
AGW is a scam so the above is just hypothetical.
One reason Kyoto was not workable was that it tried to mix a kind of international social welfare with environmentalism. Some people figured on a wealth transfer from rich to poor. That is one reason they egregiously left out at the time tomorrow's big polluters like China & India, which indeed are today's big polluters and let a terrible dirty place like Russian claim credit for shutting down its most filthy plants.
Reply | Report Abuse | Link to thisThe only thing that really works is price. We need a simple carbon tax. Helping lessen poverty is a good thing. Protecting the environment is a good thing. They both should be addressed, but not confused.
Truthe, Don't all climatologists have the same basic access there to those grants? As a scientist, you don't go into a study thinking, "I'm going to prove that global warming is caused by man," rather you ask, "Is there such a thing as global warming? and if so, what are the causes." That is, unless you are being funded by large oil companies, in which case the study has a foregone conclusion. Weren't these grants being given out for decades under both conservative and liberal administrations? I'm not sure why government grants would only fund research that would in the future lead to findings of AGW? Or are you joking? Wouldn't it be better for the government if global warming wasn't caused by our activities? After all, we are the Saudi Arabia of coal. How would you explain scientists with funding from outside of our government coming to the same conclusions?
Reply | Report Abuse | Link to thisI do agree with the general gist of the article and many of the comments. Offsets won't work in areas outside of our regulatory reach.
stevengenille at 06:21 PM on 06/04/09
Reply | Report Abuse | Link to thisThe following is a direct response to this comment.
Truthe, Don't all climatologists have the same basic access there to those grants? As a scientist, you don't go into a study thinking, "I'm going to prove that global warming is caused by man," rather you ask, "Is there such a thing as global warming? and if so, what are the causes." That is, unless you are being funded by large oil companies, in which case the study has a foregone conclusion. Weren't these grants being given out for decades under both conservative and liberal administrations? I'm not sure why government grants would only fund research that would in the future lead to findings of AGW? Or are you joking? Wouldn't it be better for the government if global warming wasn't caused by our activities? After all, we are the Saudi Arabia of coal. How would you explain scientists with funding from outside of our government coming to the same conclusions?
Believe it or not that is exactly how it is done. For the last few years if you apply for a grant for anything that might remotely prove AGW , the grant will be given and if your research might disprove AGW it will be denied.
AGW is the boogy man to get a massive tax enacted, taxes to pay for the this huge government take over of everything.
Wake up, present taxes arn't even half enough to fill this hole.
Stephengenille: In response to your question:
Reply | Report Abuse | Link to this"What do the vast majority of scientists have to gain by studying the situation and coming to the conclusion that AGW is happening?"
$$$$$$$$$$$$$$$$$$$$$ - Al Gore has the largest vested interest of all. The Climate Industrial Complex wants you (or your wallet to be precise)
And the onus is on the AGW commune to prove that AGW is real, not on others to prove that it isn't. AGW doesn't get a free pass, it needs to earn it's way into acceptance by proposing testable, verifiable experiments. Consensus is irrelevant.
Shoshin, First, Where is your proof as to your first statement?
Reply | Report Abuse | Link to thisPG, That is not how scientific research works. It doesn't matter whether you believe it does or not. Further, how could they determine if a study might prove or disprove anything before the grant was given? Wouldn't that make the grant unnecessary and the study redundant. How can you explain scientists since the 80's coming to the same conclusion over and over again despite the administration that was in power? For goodness sakes, even GE and BP acknowledge that it is real.
Take a look at this site. Read it, it has a great history of our understanding of global warming and explains the science behind the conclusions. http://www.aip.org/history/climate/index.html#L000
Are you guys getting redirected here from foxnews.com? You are the same people who were telling us for years that tobacco did not cause cancer.
I'm done arguing that the sky is blue.
Amazing how the debate is over when it isn't? The IPCC report which started the AGW scam in 1996 is a farce. The IPCC revises it's report always predicting catastrophe for the future yet never acknowledging previous false reports.
Reply | Report Abuse | Link to thisHow many times are you going to believe a group of supposed scientists that cannot prove there theory in practice? That darn climate just won't cooperate.
The report was a fraud and included as the now refuted Mann's hockey stick curve. If the IPCC models can't recreate the past so why do you think they will predict the future.
Not all of us ar lemmings walking of the the cliff. The debate is definitely still on.
BP & GE plan on making $BILLIONS on AGW, read their own talking points in their business plans and press release's.
Reply | Report Abuse | Link to thisMY statements on grant demands stands, if you had any personal experience in how things work, you would know.
If any of you actually want to learn about weather and climate science go to http://wattsupwiththat.com and read both the articles and comments. Don't talk, just read all and think about all the points,pro and con. Many of the people that post there are real climate and weather scientists.
These trading programs really make me angry. I don't know if governments are just being purposely stupid or are completely naive, but seriously, who in their right mind would expect this day's capitalists to not find outrageous loopholes to the whole thing?
Reply | Report Abuse | Link to thisThere should never have been any idea of 'offsetting' carbon emissions, because the whole concept is totally ludicrous and accomplishes nothing. Aggressive reduction and outright taxes are the way to wake these companies up to the fact that we have to be serious about this.
If you break the speed limit you get fined. If you cause pollution or emit green house gases you should also be fined too. And people that clean up their practises should be able to claim government grants to help them do so. The latter policy worked very well in Europe until carbon trading was introduced. But who will do the policing worldwide?
Reply | Report Abuse | Link to thiseco steve:
Reply | Report Abuse | Link to thisOK, here's your invoice for emitting 40,000 ppm of CO2 with every breath you take.
Bill To: eco steve
CO2 emissions fine - $1,000.00
remit to: Shoshin - who will plant a tree for your sins
(I will, really, really will...as soon as you pay your bill)
Shoshin : If you are sure that Climate Change Science and the IPCC have got it wrong, do the decent thing and Submit your data to them. If you are right, as normal scientists they will change their conclusions. Otherwise, be a little bit more modest in your pretensions and accept the advice of the majority of the world's qualified disinterested scientists, who after all are only seeking truth.
Reply | Report Abuse | Link to thisIf you just watch the world and how it works you would have already worked out that any system throwing around billions of dollars will be specifically designed to make rich and powerful people/companies richer, ensure no change in their already profitable positions and ensure you pay for the whole mess. Tax carbon and actually spend some money on simple proven alternatives. We could even research some new alternatives to this primitive, but profitable, scam.
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