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Carbon offsets—the facts
New Internationalist, July, 2006
Slicing the carbon pie
The Kyoto Protocol's Clean Development Mechanism was supposedly created to help finance sustainable development projects in the world's poorest countries. Many of its supporters argued that it would make it possible for these countries to 'leapfrog' or skip the process of industrialization to a more sustainable economic model. But most of the money is going to the largest and most industrialized emerging economies.
* The official offsets market (at current average prices for carbon credits) represents approximately $371 million of which nearly 75% goes to just 3 countries--China, Brazil and South Korea. (1,2)
* Only 3 countries (Bangladesh, Bhutan, and Nepal) from the UN's list of 50 Least Developed Countries (LDCs) have registered projects with the Clean Development Mechanism. These amount to 3 biomass and 1 micro-hydro project. (1)
* The LDCs' share of the carbon pie represents approximately 0.33% of Clean Development Mechanism financing or 1.2 million dollars. (1)
* Over two-thirds of Clean Development Mechanism projects are initiated from just 3 countries: The Netherlands (35.59%), Britain (20.34%), and Japan (15.25%). (1)
Expected average annual carbon credits* from registered projects under the Clean Development Mechanism (CDM) by host country. (1) China 30% Brazil 21% South Korea 20% India 16% Chile 3% Mexico 3% Vietnam 1% Argentina 1% Others 5% * One Certified Emissions Reduction (carbon credit generated from CDM projects) is equal to one tonne of C[O.sub.2] equivalent. Note: Table made from pie chart.
The Voluntary Offsets Industry
The average price for a tonne of C[O.sub.2] equivalent from the voluntary offsets market is approximately $1.25 (corporate rates) compared with CDM offsets that cost on average $8.50 per tonne. (3)
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Due to the unregulated nature of the voluntary market there is little reliable data concerning its size. One study suggests that the global voluntary offsets market has grown from just over 1 million tonnes of C[O.sub.2] equivalent in 2001 to nearly 9.5 million in 2004. (3) This puts the voluntary market at close to 20% the size of the official offsets regime of the CDM.
The price of going global, guilt-free
If the science of offsets were as well established as the companies selling them insist they are, then there should be little disparity between their estimates of, for example, a flight's climate impacts and the remedy.
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* According to Climate Care, an Oxford-based offset company that has a partnership with British Airways and funds projects in the South, a globe-spanning trip flying from London to visit NI offices in Toronto, Christchurch and Adelaide and then returning to London would emit approximately 6 tonnes of C[O.sub.2] and would cost $85 to offset. (4)
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* Another British company, the Carbon Neutral Company (favoured by rock stars), says the same trip would produce only 4.3 tonnes of C[O.sub.2] and would cost just $60, which apparently buys 4 trees in Durham. (5)
* An Australian company, Climate Friendly, asserts that the journey emits 11.63 tonnes of C[O.sub.2] and would cost $195 (US) to offset by financing wind projects. (6)
* Finally, Dutch offsetter, Green Seat, has determined that the flight will emit 8.68 tonnes of C[O.sub.2], and would cost $180 to offset, which apparently buys the required 434 trees in Africa. (7)
Consumption
With less than 5% of the world's population, the US consumes about 25% of the world's energy resources. (8)
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Don't be bio-fooled
It is widely believed that trees and other plants act as a carbon 'sink', absorbing carbon from the atmosphere. But a number of exhaustive scientific studies have emerged which cast doubt on this basic assertion.
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* Three to four times more carbon is stored in soils than in the vegetation above. (9)
* Scientists concluded that the Kyoto Protocol's and voluntary offset companies' promotion of tree-planting projects will enable them 'to claim carbon credits for the new planting, while in reality releasing huge amounts of C[O.sub.2] into the air', since most tree-planting involves clearing of vegetation such as grasses which absorb carbon and exposing the soil. (9)
* A six-year study published in Nature assessed the impact of nitrogen depletion in soils. It concluded that rising atmospheric C[O.sub.2] levels will affect the availability of nitrogen and other nutrients in soils and thus restrict the ability of plant biomass to absorb carbon. (10) One of the scientists in charge of the US research team behind the study concluded we 'cannot rely on nature to clean up' industrial carbon dioxide emissions. (11)
Environmental health
A common assumption is that C[O.sub.2] is a 'global' pollutant that does not adversely impact the local environment. However fossil-fuel combustion produces a whole range of toxic 'co-pollutants' which do. Carbon offsets and pollution permit trading allow polluters to increase their emissions, which puts communities living nearby at higher risk. According to scientists concerned about public health, 'the benefits of lowering emissions are immediate'. (12)
