Do Carbon Offset Programs Really Help Pollution Control?

Carbon offset programs, often used by large corporations to balance their emissions discharge, may prove less useful than hoped.

| August 2014

The majority of climate change programs employed by developed nations rely heavily on greenhouse gas emissions-reduction. Rather than adopt ineffectual programs Climate Change Policy Failures (World Scientific, 2012) by Howard A. Latin suggests a shift to a “clean” technology replacement that could support current lifestyles and expanding development without further damage to our climate. The following excerpt, from Chapter 2, discusses the ineffectiveness of voluntary carbon offset programs.

Understanding Carbon Offset Programs

Carbon offset programs are a means to exchange a number of tons of GHG (greenhouse gas) pollution reduction for an equal amount of pollution continuation. Various offset programs allow program participants with relatively low pollution control costs to profit by cutting their GHG discharges and selling the resulting emissions reductions as offset credits that could be subtracted from the buyers’ pollution control requirements. The buyer will have to pay an offset credit price — usually set by trading in a carbon market — to avoid eliminating a selected amount of its own discharges, while the offset seller must cut its emissions by the corresponding volume of GHG emission reductions at a presumably lower per-ton pollution control cost.

In a carbon offset market, the emissions-reduction reality is that a given amount of GHG pollution control anywhere can be just as effective or ineffective in abating climate change impacts as a comparable reduction anywhere else. This is true because GHG emissions are fungible and are mixed in the atmosphere over time regardless of where they were initially discharged. Offset programs can assist GHG-polluting nations, corporations, or consumers to reduce net emissions-reduction costs by letting them purchase lower-cost offset credits. In addition to shifting some expenses of GHG emissions reduction to a lower-cost basis, offset programs may also assuage consumer guilt for unsustainable behavioral choices and may help improve the public relations images of businesses or countries that are trying to “declare themselves carbon neutral” by purchasing enough offset credits to equal their cumulative GHG emissions.

The critical problem with these schemes is that the offset credit buyer will be entitled to continue pumping substantial residual GHGs into the atmosphere on the rationale that these discharges would be counter-balanced (offset) by the permanent, reliable, verifiable GHG emissions reductions offered by offset sellers. In other words, the amount of GHG pollution authorized by offset credit purchases is the equivalent of persistent residual discharges or GHG allowances. Carbon offset programs appear to be mechanisms for maintaining an allowable level of GHG pollution discharged annually into the air, but the offsets are seldom, if ever, satisfactory means for reducing the atmospheric GHG concentration. Many implementation and enforcement problems with carbon offset programs present the same types of systemic weaknesses as cap-and-trade systems, but each kind of offset program has distinctive characteristics and vulnerable points.

Here is a brief summary of three kinds of offset programs: voluntary consumer-oriented offsets; carbon offsets intended to reduce the costs of national emissions-reduction requirements or to substitute for GHG allowances in national cap-and-trade systems; and international offset programs, such as the UN Clean Development Mechanism, in which the offsets are produced in developing countries and sold to polluters in more affluent nations. National and international carbon offset programs often provide “co-benefits,” such as community development assistance or biodiversity protection, which in practice may be equally or more important to the offset-originating countries than lower-cost emissions-reduction savings would be. As a generalization, under carbon offset programs the offset suppliers benefit by receiving money or development assistance in return for the emissions reductions they provide; the offset buyers benefit by obtaining pollution control reductions at a lower cost than would be required for them to cut their own discharges; and the atmospheric GHG conditions will benefit very little, if at all.

Voluntary Carbon Offset Programs

As examples of voluntary offset programs, Marriott Hotels has adopted a plan that enables altruistic customers to pay for offsets intended to compensate for, or neutralize, GHGs that may adversely affect the Brazilian Amazon region. A number of major airlines have created carbon offset programs that will allow environmentally-disposed customers to pay to some extent for the GHG pollution harms resulting from their air travel activities. Following a UN Environment Programme (UNEP) initiative to reduce the carbon impacts of the 2010 World Cup, the sportswear manufacturer, PUMA, promised to “offset the CO2 footprint of PUMA-sponsored national football teams taking part in the Football World Cup this summer in South Africa — a total of 336 players and officials.” The common theme with these offset credits is that they are completely voluntary and are not produced, purchased, or scrutinized by any kind of official regulatory regime.

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