Carbon Offsets: a Basilica to Bad Policy

Last week’s ridiculous display of private jets in Davos, Switzerland brought back to mind a topic I have meant to discuss in detail: carbon offsets.  For those of you in the back row, a carbon offset is simply a credit based on a current or proposed activity to reduce or sequester CO₂ that is sold to someone who emits CO₂. Essentially the seller’s actions reducing or sequestering CO₂ emissions pays for the buyer’s emissions of CO₂ and for that the seller is paid in real dollars.  

Back when they were initially proposed (in the late 1980’s early 1990’s) the idea of carbon offsets seemed like a very good one. The thought was that controlling carbon emissions couldn’t be done right away. So during the transition we needed a bridge that would allow existing firms to continue to function as they transitioned to carbon-free operations. If you ran a company that absolutely couldn't do without emitting carbon then rather than shuttering your doors, and causing immediate economic hardship, maybe buying an offset would make up for the net carbon emitted in the necessary operation of your business. At the time the supporters of carbon offsets battled the supporters of “cap-and-trade” to determine what would be the dominant way to reduce regional/national/international carbon emissions. Since “cap-and-trade” needed full government buy-in and regulation, it was easily bested by the speed and apparent efficiency provided by carbon offsets.

From their beginnings carbon offsets have had their problems. The biggest being ensuring that the buyer was getting what they paid for. In the early days of carbon trading con-men saw the opportunity for a quick buck and many a company paid to preserve South American or Central American rainforests only to discover that all they had done was enrich a middleman. One of the best known of these scams was the “Vatican forest” which started as a plan to plant forests in Hungary and ended up with no forests and the Vatican losing both face and money. The oversight these days is much improved, but as I have written elsewhere, even the best laid plans (like say biofuel plantations) can fail to meet their goals of reducing carbon emissions.

From its well-meaning roots the idea of carbon offsets has fallen out of favour in the environmental community. The most scathing attack I have read to date was penned by noted author and journalist George Monbiot who likened it to the purchasing of indulgences during the middle ages. For those of you not familiar with the concept, during the middle ages the Catholic Church sold an item called an indulgence, which essentially was a “get out of hell free card”. If you happened to have the bad luck to die out of a state of grace (without having given final confession and thus with unforgiven sins still on your ledger) then your family could pay the church and your sins would be retroactively forgiven. Once your sins were forgiven your soul would, theoretically, then be able to ascend into heaven. Soon the selling of forgiveness became quite the thing and in some precincts you could pre-pay for your sins. So before you went off to murder someone you dropped the right number of pennies in the jar and if you should happen to be killed in the process you still got a promise of heaven. Needless to say many saw the selling of indulgences as ethically and morally wrong with the most famous being Martin Luther (of Lutheran fame) whose “Ninety-Five Theses” did a pretty reasonable job of demolishing the moral and intellectual support for the concept.

These days I view carbon offsets with the same level of disdain that Martin Luther viewed purchasing of indulgences in 1521. Were I to prepare my own 95 environmental theses, carbon offsets would be right up there at the top of my list. The point of the carbon offset was to move us away from our love affair with carbon and the method of doing so was through the pain of payment. Nowadays they are used to avoid having to make hard choices or make any personal sacrifices in lifestyle. These indulgences are now simply a sop to the conscience and basically represent a rich person's way of saying "Not only am I rich enough to fly on a private jet emitting carbon to my heart's content, I am also rich enough to buy myself some salvation at the other end" It is bad enough when a billionaire businessman flies his personal jet to Davos Switzerland to lecture the world on profligacy but to then say that he didn’t really emit carbon because he paid some cash, that just is the icing on the cake. It is no different than the cut-purse in 1520 dropping a penny in the jar so he can go about robbing old women with a clean conscious and the apparent blessing of the church. The point of the exercise is not to emit carbon unnecessarily (or in the case of the cut-purse not to steal). The intention was never to emit it profligately and then throw the equivalent of a couple pennies in the jar.  

While I think it is clear how I view the use of carbon offsets to allow for profligate lifestyles there is another level of environmental insult I find even more obnoxious. That is hypocritical protestors who not only buy indulgences for their carbon sins but then have the gall to protests the safest means of transporting their carbon indulgences to market. In my local region there is a battle going on about pipelines. As everyone knows pipelines represent the safest way of transporting petroleum hydrocarbons across long distances and over perilous and environmentally-sensitive terrain. Well one of the leading lights of the anti-pipeline campaign in my region has a habit of traipsing around the world by commercial jet. As anyone informed in environmental action knows commercial jets are some of the worst emitters of carbon per kilometer travelled. In any world where we want to reduce the emission of carbon we have to reduce the number of fossil fuel-powered jetliners cruising the skies. This individual argues that he needs to travel to do his good works but the trips always seem to include a component of fun and relaxation at the feature destinations. The individual excuses his sins by pointing out that he buys carbon offsets and thus his carbon debt has been paid. Of course this offset completely ignores the fact that real fossil fuels had to be used to fly those airplanes and those real fossil fuels had to get to the refinery and then the airport to allow the airplanes to take off.  Being rich enough to fly around the world and then buy carbon offsets doesn’t mean you use less fuel in your travels only that you have a sop to your conscious while doing so. The original goal of carbon offsets was to aid in reducing demand for carbon-intensive fuels but as we see these days carbon offsets do nothing to reduce that demand. Arguably because of their relatively low costs carbon offsets actually exacerbate the problem by allowing people, who should know better, to believe they are actually helping the environment as they live their lifestyles of the rich and famous.

To be clear, there are many who will disagree with my views on carbon offsets, and after this posting I am pretty sure I will hear from many of them here. What I want to hear from these people is: what does that offset do to reduce demand for fossil fuels? What does that offset do to reduce the environmental risks associated with extracting those fossil fuels from the earth? What does that offset do to reduce the risks in transporting those fossil fuels to refineries? What does that offset do to reduce the risks of moving those refined fuels to market? What does that offset do to reduce the secondary environmental concerns associated with air travel? Answer me these questions and prove to me that carbon offsets don’t represent a Basilica to bad policy.