Carbon Credits Were a Great Idea, But the Benefits Are Illusory

[Bob Simmons]

Instead of reducing our own carbon emissions, we'll pay other people to reduce theirs. Win-win!
Not so fast. Carbon offsets — and emissions-trading schemes, their industrial-scale siblings — are the environmental version of sub-prime mortgages. They both started from some admirable premises. Developing countries like China and India need to be recruited into the fight against greenhouse gases. And markets are a better mechanism for change than command and control. But when those big ideas collide with the real world, the result is hand-waving at best, outright scams at worst. Moreover, they give the illusion that something constructive is being done.

A few fun facts: All the so-called clean development mechanisms authorized by the Kyoto Protocol, designed to keep 175 million tons of CO2 out of the atmosphere by 2012, will slow the rise of carbon emissions by ... 6.5 days. (That's according to Roger Pielke at the University of Colorado.) Depressed yet? Kyoto also forces companies in developed countries to pay China for destroying HFC-23 gas, even though Western manufacturers have been scrubbing this industrial byproduct for years without compensation. And where's the guarantee that the tree planted in Bolivia to offset $10 worth of air travel, for instance, won't be chopped down long before it absorbs the requisite carbon?

Nationally managed emissions-trading schemes could do a better job than Kyoto's we-are-the-world approach by adding legal enforcement and serious oversight. But many economists favor a simpler way: a tax on fossil fuels. A carbon tax would eliminate three classes of parasites that have evolved to fill niches created by the global climate protocol: cynical marketers intent on greenwashing, blinkered bureaucrats shoveling indulgences to powerful incumbents, and deal-happy Wall Streeters looking for a shiny new billion-dollar trading toy. Back to the drawing board, please.

Source: Wired