Carbon markets and mitigation: where we’re at

An excellent piece from the Columbia Journalism Review, of all places, summarizes well the state of the art in carbon markets — a lot of kinks need ironing out — and the appalling state of many trendy “carbon-offset” schemes whereby people pay somebody to plant some trees somewhere, for instance, as a way of compensating for particularly egregious personal emissions.

In 2004, the rock band Coldplay paid Future Forests, an offset provider since renamed CarbonNeutral, to plant 10,000 mango trees in India to reduce the carbon footprint from producing the band’s most recent album. In April 2006, The Sunday Telegraph discovered that most of the saplings that were planted had “withered in the arid soil” because there was not enough money for continued upkeep. That was one of the first goofs in the system; it gets worse.

The offset game strikes me as ripe for abuse for reasons just like this. These operations are practically impossible for an individual buyer to monitor, and certainly not long-term. Spending your own money on tree-planting projects might make sense as a general act of charity, but I’m not going to take it seriously as an environmental mitigation measure.

Traded carbon credits are a much more serious business, though. They’re a major component in the Kyoto Accord, which for all its flaws is how much of the world is choosing to tackle greenhouse-gas emissions, and they need oversight that reflects that importance.

CJR‘s writer Curtis Brainard highlights a weakness in the carbon-trading mechanism sketched out in Kyoto: it doesn’t differentiate adequately between different greenhouse gases. We hear a lot about carbon dioxide, which is the biggie, but there are others, and some are easier to capture. Certain sharp operators have figured out that they can generate credits for themselves by capturing one gas, then sell polluting rights that someone else will use to emit a different gas that might end up being more harmful.

Also, we need better monitoring of what some companies are doing to lower their emissions, to make sure they’re really earning the credits they say they are. That should be up to the market operators, who’ll need auditing and compliance policies akin to those of a securities commission. This stuff can’t be set up on the back of an envelope, any more than a stock market can.

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