WCI Offsets Offer a Way Out for Polluters

Leonardo DiCaprio. The Rolling Stones.

Now add seven western state governors and four Canadian premiers. These are the most recent riders of the carbon offsets bandwagon. Carbon offsets play a central role in the Western Climate Initiative (WCI), a carbon Cap-and-Trade scheme first introduced in July, that includes seven U.S. states (Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington) and four Canadian provinces (British Columbia, Manitoba, Ontario, and Quebec).

When I first heard about the WCI, I had just returned from a wilderness leadership training. So I've decided to examine the WCI's offset program in what the enthusiastic instructors called a "compliment sandwich" (more like a "shit sandwich" as one member called it--the good followed by the ugly, ending on a good).

First some praise: well done, WCI, for setting a strident tone in your goal of reducing carbon emissions by 15 percent below 2005 levels by 2020. You came at a crucial time, as the West was experiencing some of the worst droughts and wildfires in our region's history (not to mention the grim outlook of coastal floods and species die-offs).

You are quite ambitious-but in a good way-promising to bring together regions as diverse as green-tech states like California with top coal and oil producers like New Mexico and Montana. You are the first initiative of your kind to include transportation (the highest emitting sector in the U.S.). And you aim to include about 90 percent of the region's emissions, compared to 40 percent under the EU's climate-framework.

However, among your glaring holes, one of the largest is your use of offsets, otherwise known as the "offset loophole." (In an offset program, you pay an organization to reduce their emissions instead of reducing your own.) Here are some of my main quibbles with your offsets scheme:

  • The products are intangible and difficult to measure. In the EU's carbon trading market, many offset certificates have turned out to be fakes, falling into the non-additionality trap (i.e. buying offsets in programs that were there to begin with, thereby not making any actual reductions) that plagues another Kyoto initiative, the Clean Development Mechanism. Despite this, recent Recommendations to the WCI even allow partners to buy offsets from CDM projects.
  • You propose only the following three types of offset programs: agriculture (soil and manure management), forest management, and waste management. Not only are renewables like wind and solar missing, but many of these proposed programs suffer from fuzzy science. For instance, while research does show that trees can act as an effective carbon sink, it's unclear how effective they are for offset programs, because they are neither current nor permanent. Temperate zone trees can take 40 years to reach adulthood, so they aren't necessarily sequestering carbon at the moment offsets are bought.
  • Your recent Recommendations allows 49% of an individual entity's or facility's compliance obligation (the number of permits they must use to cover their emissions) to come from offsets! That's an increase from 10% in your original Draft Design (and a lot of potentially bogus offsets if your ultimate goal is only a 15 percent reduction by 2020).
  • Finally, there is the problem of local air pollution. Since many of the most polluting facilities often locate themselves in areas with high poverty rates and a disproportionate number of racial minorities, an environmental justice problem emerges. California has three out the nation's five most polluted air basins, and it's often African American and Latin@ communities that suffer the worst air quality, leading to disproportionate rates of asthma and cancer. With an offset program, facilities have no incentive to reduce local emissions. They have no incentive to invest in cleaner technology. Everyone loses out, not only on good air quality but also on potentially innovative green-energy solutions, in exchange for a false-sense of security from redirected (and possibly phony) emissions reductions elsewhere.

As a Californian, I'm quite proud that my state has been a global leader in green energy solutions. However, all that progress (not to mention our competitive market advantage) could go out the window if suddenly companies are given the option to buy their way out of the problem. While the offsets are cheap, dealing with the future environmental and social costs will be incredibly expensive if we lock ourselves into polluting practices and technology now.

But I promised to end on a happier note. So here goes: perhaps we can use your delayed start date (January 1, 2012) to our advantage by pressuring governments to sew up your offset loophole, such as barring large hydro CDM projects, and create a truly outstanding model of regional cooperation against climate change. And by that time, hopefully with a greener administration in the White House, the federal government will follow suite.

Update: International Rivers signs letter to CARB to reduce or eliminate offsets in California