US Climate Bill: Increasing Emissions, Supporting Dams

by Payal Parekh
Friday, September 18, 2009

The good news: the US government is finally poised to mandate limits on greenhouse gases. The bad news: the bill put forth by the House of Representatives has a gaping loophole that could allow large dams to receive credits, and actually result in an increase in emissions in the short term.

The fatal flaw causing these problems is the use of "offsets" - a policy that allows polluting industries to reduce their emissions by purchasing carbon credits rather than reducing emissions at their own facilities. The credits ("offsets") are given for supporting projects in developing countries. One would expect such a system to support the development of true renewables in developing countries, but sadly, this is not the case. The most prevalent project type in the world's largest offsets market is hydropower, which means that large, destructive dams are receiving credits. Not only are offsets supporting projects that have adverse environmental and social impacts, but most of these offsets probably do not even represent real emissions reductions.

For dam developers, offsets represent a new source of income at the expense of the climate, rivers and communities that depend on them. For the planet, it's a step backward. Laws that sacrifice rivers for the sake of the atmosphere will make it harder to adapt to a changing climate. The Allain Duhangan Dam in the Indian Himalayas is a good example of how offset projects trample on the rights and livelihoods of local communities, and damage the environment. The Ombudsperson of the World Bank found that the project developer had not ensured enough irrigation and drinking water for affected villagers.The project was also temporarily halted and fined for blatant violations of Indian forest conservation law due to illegal felling of trees, dumping of waste and road construction. This project is not unique - many of the hydro dams benefitting from offsets have major social and environmental problems.

Despite reports critical of offsets by the federal government's own General Accounting Office, the House climate and energy bill allows for two billion offsets yearly - the equivalent of 30% of United States emissions in 2005. If polluters indeed use the maximum allowable number of offset credits, domestic emissions in 2012 would increase by 38% rather than decrease by 3%, the reduction set by the bill. Emissions would not dip below 2005 levels until 2030, 18 years from today. That's a generation too late.

Offsets slow the transition to a new green economy. The longer action is delayed, the more difficult and expensive it will be to make reductions in the future. And by then it may be too late. The most recent science suggests that developed countries must decrease their emissions by at least 40% relative to 1990 by 2020. Scientists are worried that if emissions don't come down quickly, the earth may reach the "tipping point," which will result in abrupt climate change that is irreversible. Given these grave risks, we can't afford to have offsets further water down these weak targets.

Offsets also allow corrupt gaming of the system, to the point that many do not even represent actual emission reductions. We know that cutting-edge technologies are not initially as competitive as long-established (and already subsidized) technologies - think solar vs. coal. Any money raised from offsets should be used to help bridge this gap for new clean technologies, so that a solar project, for example, can be competitive. Unfortunately, projects that can't move forward without additional funding are not the primary beneficiaries of offsets. Most of the money is going to projects that would have been built anyway (or in some cases are already built!).

As I write this, the US Senate has not yet passed its version of the bill, so there is still time to influence it. Grassroots pressure is integral to ensuring that we get a strong climate bill. International Rivers is working hard to inform Senators about the dangers of offsets, and encouraging them to exclude offsets from their version of the bill. We will be calling on our US supporters soon to contact your Senators about this issue. They need to know that the American public will not stand for half-baked solutions to climate change.