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Summary:

‘No good deed goes unpunished’ seems to be the theme of the dubious and largely unregulated world of carbon offsetting. The House of Representatives is the most recent carbon offset customer to learn this lesson. In November of 2007 the House purchased $89,000 worth of carbon […]

‘No good deed goes unpunished’ seems to be the theme of the dubious and largely unregulated world of carbon offsetting. The House of Representatives is the most recent carbon offset customer to learn this lesson. In November of 2007 the House purchased $89,000 worth of carbon offsets through the Chicago Climate Exchange (CCX) to offset their half of the Capitol’s carbon footprint, according to the Washington Post. However, critics now question whether these taxpayer-financed offsets are actually facilitating new carbon abatement. Too often money from carbon offset purchases pay for projects that would have happened regardless of carbon offset money.

The problem of carbon offsets is centered on the idea of “additionality.” The purchase of a carbon offset should fund additional offsetting projects that would not have happened otherwise. The problem is that the necessary regulatory and certification infrastructure to verify these projects doesn’t exist. With little regulation on carbon trading and offsetting, the American carbon market is the Wild West of cleantech.

The issue of additionality plagues the emerging international carbon market as well. Around the same time Congress was purchasing these offsets, the World Wildlife Fund released a report denouncing 20 percent of the UN’s certified emissions reduction credits, as facilitated through the controversial clean development mechanism, as bogus.

Another problem with the American carbon market is the offsets are massively undervalued. While a metric ton of carbon trades for over $30 on the much more tightly regulated European Climate Exchange, Congress purchased 30,000 metric tons of offsets at about $2.97 per metric ton from CCX. This price point does not serve as a serious incentive for new offsetting projects to be undertaken.

Perhaps Congress’s good intentions were not all for naught. The taxpayers dollars have been spent and now Congress is accountable for the authenticity of their offsets. Now that Congress has funded the carbon market they need to make sure they are getting their money’s worth.

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  1. Green Energy News Blog » Blog Archive » How Structure can Optimize the Carbon Offset Market Monday, February 4, 2008

    [...] article clearly identifies the additionality issue. Did our taxpayer dollars actually change anything? Or did we pay for something that already happened or would have happened [...]

  2. Green energy is definitely the best solution in most cases. Technology like solar energy, wind power, fuel cells, zaps electric vehicles, EV hybrids, etc have come so far recently. Green energy even costs way less than oil and gas in many cases.

  3. Carbon Market Software Startup Ramps Up Funding « Earth2Tech Friday, November 7, 2008

    [...] by inefficiencies, a lack of transparency and are still sort of a Wild West stage at this point. Critics question whether carbon offsets projects are actually facilitating new carbon abatement, and the World [...]

  4. Google vs. Yahoo: The Changing Face of “Carbon Neutral” Thursday, July 9, 2009

    [...] of going “carbon neutral” using offsets had gained enough clout in the U.S. that the House of Representatives spent about $89,000 on offsets. A host of tech companies jumped aboard, too, with Dell, Google and Yahoo, among others, all [...]

  5. Way to Go Green Friday, August 7, 2009

    We use Wind Power which is very popular around here. There are several large wind farms within 15 miles and several home owners that produce their own wind power. Thanks for writing about carvon offsets. Wind is a great energy resource.

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