Can you buy a greener conscience?

The commodification of ethics comes in for more scrutiny. The LA Times is on the issue, too:

The race to save the planet from global warming has spawned a budding industry of middlemen selling environmental salvation at bargain prices.

The companies take millions of dollars collected from their customers and funnel them into carbon-cutting projects, such as tree farms in Ecuador, windmills in Minnesota and no-till fields in Iowa.

In return, customers get to claim the reductions, known as voluntary carbon offsets, as their own. For less than $100 a year, even a Hummer can be pollution-free — at least on paper.

Tom Boucher, chief executive of Native Energy, said people should first reduce their energy consumption and waste, and then buy offsets — “the only way to really get to zero unless you stop driving, stop traveling.”

But the industry is clouded by an approach to carbon accounting that makes it easy to claim reductions that didn’t occur. Many projects that have received money from offset companies would have reduced emissions by the same amount anyway.

This is the point I was making back with the Wired article (none of my students seem to have found this site, so my reticence was entirely wasted).

Cap-and-trade, for example, works because the trade is pushed along by the cap. We trade a steadily declining commodity: the right to pollute. Voluntary carbon-neutral schemes do not. One’s right to pump shit out their exhaust pipes is not declining, and paying for trees that already exist are not going to help that. There is a chance, certainly, that your donation may secure a tree that otherwise would fall – but that, too, is not saving the planet. Planting trees, sure (say, via Future Forests), as long as the carbon neutralised is measured accurately and sold honestly.

As with the Wired article, which touted companies buying the right to pave over a wetland – there is a net reduction in wetlands as a result. The purchase of some environmental credibility was only that: the wetlands, and the service they provide to the planet, were not replaced.

This is the key problem with voluntary carbon conscience ameliorating: the markets are fundamentally different. Cap-and-trade works because the market for pollution is tied directly to the credits being traded. A lot of the trading schemes (and the LA Times article has plenty) do not meet this key criterion. Purchasing something that already exists (moreso if it’s an acre of trees in Asia, somewhere) is one market. Cutting down trees, burning up petrol, etc. (moreso if it is not in Asia) is another market, and neither economics nor biology will say the two can cancel each other out.

More importantly, without the ‘cap’ aspect, the price in the ‘trade’ part isn’t representing what relatively sound economic theory dictates. There is meant to be a price attached to the reduction of pollution. With not a single limit placed upon one’s household carbon emissions, and a price on offsets that do not reflect the scarcity invoked by those limits, we are probably buying little more than the Feeling of Good. You may as well go by some weed and smoke it until you feel better. You even get the benefit of irony of burning plant matter.

The LA Times article mentions the potential for Federal Trade Commission involvement in the industry (that is, here in the US). I won’t say it’s about time, because the industry (or rather, this aspect of it) has only been around for a few years, and it’s still only worth about USD55m per year – compare that with the hundreds of billions, collectively, that the polluting industries are worth. It will be nice to see some standards, some proper accounting, and some honesty in advertising. Proper engagement by carbon-offset purchasers would be nice, too.

I have a better idea, if one is truly into off-sets. When one buys something expensive, or anything that is not a luxury, they should give five bucks to the first panhandler that they see. What’s the relationship between that new dress, or that big meal, and this man living on the streets? None. That dress didn’t put him there, that five bucks will not get him out, and that five bucks will not help the person who sewed the dress for a pittance. But if one is principally after the assuagement of guilt, I think there at least exists a moral obligation to face the ugly side of the issue. Half our problem isn’t what we buy or do, but what we are permitted to ignore.


5 comments so far

  1. gninja on

    Your last suggestion would, for the most part, work only in urban areas. People who live outside of cities (in the US) don’t see homeless people. Just as those of us who live in big cities are shielded from the reality of how much energy and how many resources it takes to make our cities exist, so are the people who live in the suburbs shielded from the amount of poverty that exists outside of their gated enclaves. I think some other kind of off-setting, according to your model, would be needed to fit the suburban way of life.

  2. zooeygoethe on

    That was part of the point. Suburban living is designed as one’s escape from urbanised ugliness. I wasn’t putting any of this forth as a practical solution: I was highlighting the need for honesty about just what it is we’re purchasing.

  3. Sean O on

    I write about this a lot on my site that covers global warming ( and I am typically very skeptical of carbon trading schemes.

    P.T. Barnum supposedly said that there was a sucker born every minute. Sometimes, when I read about carbon credits, I am not sure who the sucker is – the person buying, the person selling, or the general public for thinking it is helping!

    In order for credits to be feasible and to be more than a “feel good” gesture, we need solid accounting, accountability, and penalties. We have none of that now and this article makes this painfully clear. We cannot allow credits to be used for minor contributions to a project. The credit must go to the cost of reducing the greenhouse gas.

  4. billy connelly on

    Regarding the LA Times story –

    The reporter, Alan Zarembo, did get some things correct, but he failed to communicate some critical facts and background that complete the picture without a misleading slant.

    We have posted our Letter to the Editor of the LA Times on our website

    And, we have posted a more powerful and personal message in response, the Van Gilders’ Letter to the Editor

    Recognizing the complexity of the carbon offsets market; NativeEnergy has had to correct similar media inaccuracies during the past 7 years.

    Aware of the factual errors made in this article, we simply wanted to bring the accurate details to your attention and clarify the misleading statements, as they could be further mistaken as legitimate in future media coverage.

    First, NativeEnergy typically contracts with projects before they are constructed and begin operation. We then turn to the marketplace to allow individuals or businesses, to purchase the offsets — together they fully subscribe the offsets, enabling the payment that is made to the project for its expected lifetime of carbon offsets.

    A project may be fully funded and operational by the time the offset is sold – but this does not invalidate the carbon offset. Rather, it is NativeEnergy’s promise to the project that helps it secure the other necessary financing, such as grants. And as you know, when done properly and with a reputable carbon offset partner, offsetting is absolutely real and does make a difference in reducing the amount of CO2 that otherwise would be emitted.

    Next, in reality, the offsets for “An Inconvenient Truth” related carbon footprints are actually from 4 different, new ‘help build’ projects that were moving toward construction; 3 of which have now been completed. Indeed, the footprint of “An Inconvenient Truth” is relatively small – that’s a good thing – and offsetting is a good deal. There is no other way to get to zero global warming impact. It’s easy, effective and inexpensive. And, in this country, it is currently 100% voluntary.

    In regards to NativeEnergy specific projects, we began discussions with the Van Gilder family at their kitchen table in 2003 – not in 2006, as Alan writes – and agreed to purchase carbon offsets from the Van Gilder’s to allow them to meet their portion of the financing package early in 2004. The project proceeded with construction in 2006 after additional funding from other sources was secured, including additional payments from NativeEnergy. Certainly we were not the reason the farm wanted to build the project, but we were an important funding component. Although they may have been surprised that there was a market for the carbon offsets – an unexpected bonus, perhaps – the role in helping them finance the project is an indisputable fact.

    David Van Gilder has confirmed this in his Letter To The Editor of the LA Times.

    Concerning the Alaska Native Village wind project, Mr. Zarembo got some facts right, but missed a few and trivialized an important feature of the complete “barriers” tests used to assess project-specific additionality. The situation was quite different for AVEC’s wind project in Alaska. As we openly discussed with the reporter, the role of offsets in this case was to provide operations and maintenance funding – not to add more capital dollars that were being met mostly by federal grants. This important distinction was not mentioned in the LA Times story. In this instance, the issue is not “whether the blades turn or not,” but whether they turn often enough. This project met NativeEnergy’s strict additionality criteria due to the first of its kind installation and technology barriers. Performing a critical role in enabling the replicability of these projects is a creditable use of carbon offset funding.

    These are a few of the misconceptions and errors conveyed in this article. We hope this clarifies some of the murky waters and prevents perpetuating inaccuracies to the general public. NativeEnergy highly values education and transparency; as this complex issue quickly becomes mainstream, the truth emerges, and with increasing community and business support we continue to succeed in building a more sustainable energy future.

    Thank you again for your continued interest and partnership, for working with us to help support high quality carbon offsets from new projects like the Dovan Farm project.


    Billy Connelly
    NativeEnergy, Inc.

  5. zooeygoethe on

    Thank you for that post. Very interesting perspective to have on hand. I do see that distinction: non-environmentalist-minded folk might think instead of all the weird anti-terrorist gadgetry given to your local cops by the FBI 3 years ago, now sitting idle because those local-cop budgets can’t maintain them. With no extra money to keep something running …

    As I said, what I want for this market is some form of restriction (of which I cannot think, for households, I confess. Someone smarter than me will have to do that) that pushes the two markets, carbon-emitting and carbon-offsetting, together.

    A standard for accounting, reporting, etc. is of most value, I think. Even to enterprises such as NativeEnergy – you might not have to spend time clearing up what your company does vs. other companies, or the perception of the market as a whole..

    Anyway. I appreciate the post. Thank you very much.

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